US Dollar Bill - Inflation

FX Week Ahead - Top 5 Events: UK Jobs Report; US Retail Sales; Inflation Data from Canada, the Eurozone, and the UK

Nov 16, 2021

By: Christopher Vecchio

FX Week Ahead Overview:

  • US consumption trends are in focus after last week’s blowout October US CPI report.
  • Inflation pressures are no longer being dismissed as transitory by markets, which means three of the four inflation reports due this week have a high likelihood of producing volatility in markets.
  • Strong jobs numbers and hot inflation data out of the UK could help provide the spark the British Pound needs to recoup its BOE-induced losses.

For the full week ahead, please visit the DailyFX Economic Calendar.


The UK economy has seemingly overcome recent upticks in COVID-19 infections as the economy has been opened full-tilt, and the outcome for the UK labor market has been a positive one. According to a Bloomberg News survey, the UK economy gained+185K jobs in the three months through August 2021, and the unemployment rate fell from 4.5% to 4.1% in September. The upcoming UK jobs report, which covers various aspects of the labor market in June, July, August, and September, points to an improving outlook that may help resuscitate BOE rateb hike odds.


Consumption is the most important part of the US economy, generating around 70% of the headline GDP figure. The best monthly insight we have into consumption trends in the US might arguably be the ‘retail sales advance’ report. In the wake of the October US inflation report (CPI) that showed the highest price pressures since 1990, traders are wondering if US consumers began to close their wallets, finding certain goods and services too expensive.

Nevertheless, according to a Bloomberg News survey, headline US retail sales are expected to have grown by +1.1% in October after posting a modest +0.7% gain in September (m/m). The Atlanta Fed GDPNow 4Q’21 growth tracker, currently at +8.2% annualized, will be updated after the US retail sales data are released.


Bank of England Chief Economist Huw Pill started the week by noting that “if we don’t act there is a danger that inflation achieves some self-sustaining momentum that we will have to resist down the road.But equally I think that if we act prematurely there is a danger that we derail some of the recovery which is still in some respects quite fragile.”

With this context, particularly after the November BOE meeting, the upcoming UK inflation report will carry additional weight. According to a Bloomberg News survey, the October UK inflation rate (CPI) is due in at +3.9% from +3.1% (y/y), while the core inflation rate is due in at +3.1% from +3.2% (y/y). If UK inflation rates jump considerably like their American counterparts, speculation around the first BOE rate hike should be revived, which should help the British Pound recover from its early-month woes.


The final October Euroarea inflation rate (CPI) report is the top item of interest for the Euro this week, although ECB President Christine Lagarde may have taken some wind out of the report’s sails. ECB President Lagarde noted that the ECB still sees“inflation moderating in the next year, but it will take longer to decline than originally expected,”a suggestion that any upside price pressures won’t be met by a response by the central bank. According to Bloomberg News, the headline Euroarea inflation reading is due in at +4.1% from +3.4% (y/y), while the core reading is due in at +2.1% from +1.9% (y/y).


According to a Bloomberg News survey, the October Canada inflation rate (CPI) is forecasted to show an increase of +4.7% from +4.4% (y/y), while the core reading is due in at +3.9% from +3.7% (y/y). As has been the case in recent months, while these figures remain lofty, they are not due to show the same type of acceleration that their American counterparts did just last week. But more upside price pressures could spur a faster rate hike cycle by the BOC, which has already surprised markets in recent weeks by abruptly ending their QE program; rising BOC rate hike odds would be supportive of the Canadian Dollar near-term.

Written by Christopher Vecchio, CFA, Senior Strategist

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastytrade content is provided solely by tastytrade, Inc. (“tastytrade”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. tastytrade, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastytrade is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparison, statistics, or other technical data, if applicable, will be supplied upon request. tastytrade is not a licensed financial advisor, registered investment advisor, or a registered broker-dealer. Options, futures and futures options are not suitable for all investors. Prior to trading securities products, please read the Characteristics and Risks of Standardized Options and the Risk Disclosure for Futures and Options found on tastyworks.com.

tastyworks, Inc. ("tastyworks") is a registered broker-dealer and member of FINRA, NFA and SIPC. tastyworks offers self-directed brokerage accounts to its customers. tastyworks does not give financial or trading advice nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastyworks’ systems, services or products. tastyworks is a wholly owned subsidiary of tastytrade, Inc (“tastytrade”). tastytrade is a trademark/servicemark owned by tastytrade.

Quiet Foundation, Inc. (“Quiet Foundation”) is a wholly-owned subsidiary of tastytrade The information on quietfoundation.com is intended for U.S. residents only. All investing involves the risk of loss. Past performance is not a guarantee of future results. Quiet Foundation does not make suitability determinations, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of Quiet Foundation’s systems, services or products.

Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information on this site should be considered general information and not in any case as a recommendation or advice concerning investment decisions. The reader itself is responsible for the risks associated with an investment decision based on the information stated in this material in light of his or her specific circumstances. The information on this website is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. Trading in derivatives and other financial instruments involves risk, please read the Risk Disclosure Statement for Futures and Options. tastytrade is an investor in Small Exchange, Inc.

© copyright 2013 – 2021 tastytrade. All Rights Reserved. Applicable portions of the Terms of use on tastytrade.com apply. Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastytrade’s podcasts as necessary to view for personal use.