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  • Get your basics right. Find out what is stock market volatility and how you can trade It here:https://t.co/pK95WaqA3j https://t.co/sLMza2wKYd
  • The Japanese Yen continues to be pummeled against most major currencies. Get your weekly Japanese Yen forecast from @HathornSabin here: https://t.co/WY5rcoqNP2 https://t.co/JT8yOUgceA
  • The US Dollar paused its advance against ASEAN currencies. USD/SGD eyes a key trendline, USD/THB risks stalling, USD/PHP enters consolidation as USD/IDR continues ranging. Get your market update from @ddubrovskyFX here:https://t.co/Hd4mu0MKkp https://t.co/1kOgueJOXz
  • The economic calendar has its top listings (China GDP among them), but traders would do well to keep tabs on themes like the Fed outlook, an imminent Bitcoin record and lurking China contagion. What I'm watching for next week: https://www.dailyfx.com/forex/video/daily_news_report/2021/10/16/Dollar-Deals-with-Tight-Fed-Outlook-Bitcoin-Eyes-Record-Energy-Crisis-Worries-Continue.html https://t.co/LrlZXmF8jK
  • Crude oil and coal prices hit fresh levels overnight as supply issues threaten to worsen an already fragile energy situation. Asia is particularly susceptible after regional flooding shuttered coal mine operations. Get your market update here:https://t.co/tgIsootO7y https://t.co/2RlYVgawgf
  • The Japanese Yen has moved lower across the board and is making multi-year lows against the USD. Will it snap the range, and do the same against EUR? Get your market here:https://t.co/tQYc6cPuM0 https://t.co/YDEELagtTb
  • The British Pound has bounced off its low against USD while it’s trapped in wide ranges against the EUR and CHF. How long will GBP be tied to its Continental Europe constituents? Find out here:https://t.co/xs3EMWWIom https://t.co/aHXoGbOBKq
  • (Weekly Fundy) Australian Dollar Outlook: AUD/USD Back on the Offensive as Covid Restrictions Ease #AUD $AUDUSD #Covid https://www.dailyfx.com/forex/fundamental/forecast/weekly/aud/2021/10/16/Australian-Dollar-Outlook-AUDUSD-Back-on-the-Offensive-as-Covid-Restrictions-Ease.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/sGSPXKQyne
  • The Australian Dollar is seemingly back on the offensive as lockdowns ease in Sydney and Melbourne. Improving sentiment may allow AUD/USD to capitalize on rising equities and commodity prices. Get your weekly $AUD forecast from @ddubrovskyFX here: https://t.co/JDhqHY9OW1 https://t.co/JyLUT4cNnF
  • The Dow Jones and S&P 500 appear to be vulnerable as retail traders continue to buy into their pullbacks. This is shown via IGCS, which is typically a contrarian indicator. Get your market update from @ddubrovskyFX here:https://t.co/DsbgWvDNP6 https://t.co/xZpbBYE7Dc
S&P 500 and FTSE 100 Forecasts for the Week Ahead

S&P 500 and FTSE 100 Forecasts for the Week Ahead

Justin McQueen, Strategist

S&P 500, FTSE 100 Analysis and News

  • S&P 500 | State-Wide Restrictions to Damage Risk Appetite
  • FTSE 100 | UK Assets Remain Unloved Amid Political Uncertainty
Equity market performance

Source: DailyFX

S&P 500 | State-Wide Restrictions to Damage Risk Appetite

COVID Cases Rising Sharply in the US

Coronavirus cases in the US reached a record daily high as concerns mount over a potential second wave in a number of states across the US. This has been most evident in Florida and Texas, in which the latter has halted plans of further reopening and thus raises concerns over the trajectory of the economic recovery, particularly if an escalation prompts state-wide lockdowns. That said, this is not just a US-centric story as other countries have also seen a pick up in COVID cases, including Germany, Japan, and China. As such, market participants will continue to assess the rising number of virus cases, whereby a continued pick up can keep risk appetite pressured. Notable economic data points to watch include the US ISM Manufacturing PMI and Non-Farm Payrolls

Portfolio Rebalancing Flows

In other news, with the end of the month and quarter nearing, attention will be placed on potential rebalancing, in which investment banks have signaled a possible sizeable outflow from equities into fixed income in light of the outperformance across the equity space.

S&P 500 Price Chart: Daily Time Frame

S&P 500 Price Chart

Source: IG Charts

Softer Equities is Dollar Supportive

Cross asset correlation matrix

Source: Refinitiv, DailyFX

FTSE 100 | UK Assets Remain Unloved Amid Political Uncertainty

UK-EU trade talks intensify as both parties look to head for a showdown throughout the Summer and Autumn months. The current impasse and continued political uncertainty sees UK assets remain unloved among investors. As such, with both the EU and UK unlikely to reach a breakthrough next week as the deadline for a transition period extension passes, upside in the FTSE appears to be limited.

Elsewhere, focus will also be on the Bank of England with several speeches scheduled for next week. Perhaps the most intriguing will be the speech of Chief Economist Andy Haldane who dissented at the prior meeting, by voting against boosting QE. That said, continued rhetoric over negative interest rates being adopted in the UK will also be of note.

BoE Speakers in Full Force

BOE speaker schedule

Source: Bank of England

FTSE 100 Price Chart: Daily Time Frame

FTSE 100 Charts

Source: IG Charts

RESOURCES FOR TRADERS

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

--- Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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