Investing.com – Last week saw the euro decline against the U.S. dollar on Friday, erasing the week’s gains after ratings agency Fitch downgraded its ratings on Spain and Italy, reigniting fears over contagion from the region’s financial crisis.
Italy’s rating was cut to A+ from AA- while Spain’s rating was reduced by two notches to AA- from AA+. The euro fell broadly following the announcement, retreating from a one-week high against the greenback.
The euro had been boosted earlier, as the release of better-than-expected U.S. employment data supported demand for riskier assets.
The Department of Labor said nonfarm payrolls rose by 103,000 in September, far more than the expected 53,000 gain, while payrolls for the previous two months were revised up by a total of 99,000. The unemployment rate remained unchanged at 9.1%.
Earlier in the week, Federal Reserve Chairman Ben Bernanke said that the U.S. economic recovery has been far less robust that the Fed had hoped, adding that the central bank was ready to do more to help the U.S. economy.
On Thursday, the European Central Bank announced new measures to refinance European lenders, in response to the debt crisis in the euro zone.
The ECB said it would advance new loans to banks with maturities up to 13 months and resume buying bank bonds. The announcement came after the central bank left its interest rate unchanged at 1.5%.
Elsewhere Thursday, the pound tumbled to a 14-month low against the greenback after the Bank of England implemented a fresh round of monetary easing measures, amid concerns over weakening economic conditions in the U.K.
BoE policymakers voted to increase the bank’s asset purchase program by GBP75 billion, to GBP275 billion, to shore up the U.K. economy which has come under pressure from government spending cuts, a slowdown in global growth and the deepening financial crisis in the euro zone.
The BoE left interest rates unchanged at a record low of 0.5%.
In the coming week, developments in the euro zone look likely to remain in the spotlight, amid ongoing speculation that Greece may have to default. Meanwhile, investors will be looking towards Friday’s U.S. data on retail sales to gauge the strength of the U.S. economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 10
Australia is to publish a report on job advertisements, an important indicator of demand in the labor market. In Japan, markets are to remain closed for a national holiday.
The euro zone is to release a report on investor confidence, an important indicator of economic health. Meanwhile, France is to release official data on industrial production.
Also Monday, markets in Canada will be closed for the Thanksgiving holiday. In the U.S., debt markets will remain closed for the Columbus Day holiday, while stock markets will be open as usual.
Tuesday, October 11
Australia is to publish a report on business confidence, an important indicator of economic health. Elsewhere, the Bank of Japan is to release its monthly report, which gives investors a detailed insight into current and future economic conditions from the bank’s perspective.
In the euro zone, ECB President Jean-Claude Trichet is to testify before the European Parliament's Economic and Monetary Committee, in Brussels; his comments will be closely watched for any indication of the future possible direction of monetary policy.
The U.K. is to publish official data on manufacturing production, a leading indicator of economic health. The country is also to release industry reports on retail sales and house prices. In addition, the National Institute of Economic and Social Research is to publish its monthly GDP estimate.
Later in the day, Canada is to produce government data on housing starts, a leading indicator of health in the housing sector. Also Tuesday, the U.S. is to publish data on economic optimism.
Wednesday, October 12
Australia is to release a report on consumer sentiment, an important indicator of economic strength. The country is also to produce official data on home loans, a leading indicator of demand in the housing market.
Japan is to release government data on machinery orders, a leading indicator of manufacturing production. Later in the day, New Zealand is to release data on food price inflation and manufacturing activity.
The U.K. is to produce government data on claimant count change, a leading indicator of economic health. The country is also to publish official data on average earnings and the unemployment rate.
The euro zone is to publish official data on industrial production, while later in the day ECB President Jean-Claude Trichet is to speak.
Also Wednesday, Canada is to publish official data on house price inflation, a leading indicator of economic health. Meanwhile, the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.
Thursday, October 13
The BoJ is to publish the minutes of its most recent policy-setting meeting. Meanwhile, Japan is to publish official data on tertiary industry activity, a leading indicator of economic health.
Australia is to publish government data on employment change and the unemployment rate, a leading indicator of economic strength. The country is also to publish a report on inflation expectations.
In the euro zone, the ECB is to release its monthly bulletin, which provides a detailed insight into current and future economic conditions from the bank’s point of view. Elsewhere, Germany is to publish revised data on consumer price inflation.
Elsewhere in Europe, Switzerland is to produce government data on producer price inflation, a leading indicator of consumer inflation. The U.K. is to publish official data on the trade balance, the difference in value between imported and exported goods over the reported month.
Later in the day, Canada is also to publish data on its trade balance. Meanwhile, the U.S. is to release its weekly government report on initial jobless claims, as well as data on crude oil stockpiles, the federal budget balance and the trade balance.
Friday, October 14
The euro zone is to publish official data on consumer price inflation, which accounts for a majority of overall inflation. The euro zone is also to publish data on the trade balance.
Later in the day, Canada is to produce government data on manufacturing sales, a leading indicator of economic health.
The U.S. is to round up the week with official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish official data on import prices and business inventories. In addition, the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.
Also Friday, the G20 Group is to hold the first day of a two-day summit meeting.
Italy’s rating was cut to A+ from AA- while Spain’s rating was reduced by two notches to AA- from AA+. The euro fell broadly following the announcement, retreating from a one-week high against the greenback.
The euro had been boosted earlier, as the release of better-than-expected U.S. employment data supported demand for riskier assets.
The Department of Labor said nonfarm payrolls rose by 103,000 in September, far more than the expected 53,000 gain, while payrolls for the previous two months were revised up by a total of 99,000. The unemployment rate remained unchanged at 9.1%.
Earlier in the week, Federal Reserve Chairman Ben Bernanke said that the U.S. economic recovery has been far less robust that the Fed had hoped, adding that the central bank was ready to do more to help the U.S. economy.
On Thursday, the European Central Bank announced new measures to refinance European lenders, in response to the debt crisis in the euro zone.
The ECB said it would advance new loans to banks with maturities up to 13 months and resume buying bank bonds. The announcement came after the central bank left its interest rate unchanged at 1.5%.
Elsewhere Thursday, the pound tumbled to a 14-month low against the greenback after the Bank of England implemented a fresh round of monetary easing measures, amid concerns over weakening economic conditions in the U.K.
BoE policymakers voted to increase the bank’s asset purchase program by GBP75 billion, to GBP275 billion, to shore up the U.K. economy which has come under pressure from government spending cuts, a slowdown in global growth and the deepening financial crisis in the euro zone.
The BoE left interest rates unchanged at a record low of 0.5%.
In the coming week, developments in the euro zone look likely to remain in the spotlight, amid ongoing speculation that Greece may have to default. Meanwhile, investors will be looking towards Friday’s U.S. data on retail sales to gauge the strength of the U.S. economic recovery.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 10
Australia is to publish a report on job advertisements, an important indicator of demand in the labor market. In Japan, markets are to remain closed for a national holiday.
The euro zone is to release a report on investor confidence, an important indicator of economic health. Meanwhile, France is to release official data on industrial production.
Also Monday, markets in Canada will be closed for the Thanksgiving holiday. In the U.S., debt markets will remain closed for the Columbus Day holiday, while stock markets will be open as usual.
Tuesday, October 11
Australia is to publish a report on business confidence, an important indicator of economic health. Elsewhere, the Bank of Japan is to release its monthly report, which gives investors a detailed insight into current and future economic conditions from the bank’s perspective.
In the euro zone, ECB President Jean-Claude Trichet is to testify before the European Parliament's Economic and Monetary Committee, in Brussels; his comments will be closely watched for any indication of the future possible direction of monetary policy.
The U.K. is to publish official data on manufacturing production, a leading indicator of economic health. The country is also to release industry reports on retail sales and house prices. In addition, the National Institute of Economic and Social Research is to publish its monthly GDP estimate.
Later in the day, Canada is to produce government data on housing starts, a leading indicator of health in the housing sector. Also Tuesday, the U.S. is to publish data on economic optimism.
Wednesday, October 12
Australia is to release a report on consumer sentiment, an important indicator of economic strength. The country is also to produce official data on home loans, a leading indicator of demand in the housing market.
Japan is to release government data on machinery orders, a leading indicator of manufacturing production. Later in the day, New Zealand is to release data on food price inflation and manufacturing activity.
The U.K. is to produce government data on claimant count change, a leading indicator of economic health. The country is also to publish official data on average earnings and the unemployment rate.
The euro zone is to publish official data on industrial production, while later in the day ECB President Jean-Claude Trichet is to speak.
Also Wednesday, Canada is to publish official data on house price inflation, a leading indicator of economic health. Meanwhile, the Federal Reserve is to publish the minutes of its most recent policy-setting meeting.
Thursday, October 13
The BoJ is to publish the minutes of its most recent policy-setting meeting. Meanwhile, Japan is to publish official data on tertiary industry activity, a leading indicator of economic health.
Australia is to publish government data on employment change and the unemployment rate, a leading indicator of economic strength. The country is also to publish a report on inflation expectations.
In the euro zone, the ECB is to release its monthly bulletin, which provides a detailed insight into current and future economic conditions from the bank’s point of view. Elsewhere, Germany is to publish revised data on consumer price inflation.
Elsewhere in Europe, Switzerland is to produce government data on producer price inflation, a leading indicator of consumer inflation. The U.K. is to publish official data on the trade balance, the difference in value between imported and exported goods over the reported month.
Later in the day, Canada is also to publish data on its trade balance. Meanwhile, the U.S. is to release its weekly government report on initial jobless claims, as well as data on crude oil stockpiles, the federal budget balance and the trade balance.
Friday, October 14
The euro zone is to publish official data on consumer price inflation, which accounts for a majority of overall inflation. The euro zone is also to publish data on the trade balance.
Later in the day, Canada is to produce government data on manufacturing sales, a leading indicator of economic health.
The U.S. is to round up the week with official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The U.S. is also to publish official data on import prices and business inventories. In addition, the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.
Also Friday, the G20 Group is to hold the first day of a two-day summit meeting.