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Week Ahead: Retail Sales Could End the Stock Rally |
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The first full week in the month is often a busy one for economic announcements. The second week is usually much quieter and this week looks to be a good example of that. I am sure there will be no shortage of volatility but there are very few key announcements that we will be planning for. 
There are a couple of retail sales numbers due for October this week from New Zealand and the U.S. I am always interested in the kiwi retail sales numbers as they can often have a very predictive affect on the currency for short term trades. If retail sales are very poor this week that could lead to a nice move to the downside on the NZD/USD. However, the big release will be from the US particularly since this is the 4th quarter when traders and a analysts start spending a lot of time talking about retail numbers and profits.
Retail profits are very concentrated in the 4th quarter in the US because of holiday shopping. Because current consumer confidence is at extreme lows, the retail sales number is likely to disappoint as well. That could be very bad for stocks and even worse for JPY quoted crosses in the forex. All of which could be very good for the current trend in the forex.
Retail sales are not due to be released in the US until the end of the week. That means that this week could be just the inverse of last week with a strong start in equities and a weak dollar and falling stocks and a rising dollar towards the end of the week.
We will be back on the Learning Markets website each day this week to talk about what is going on and what traders can do about it.
 Click here for the week ahead in the forex video.
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