Trading Week Ahead: U.S. Shutdown Nears Possible End

• U.K. GDP
Thursday’s GDP release offers a crucial update on the health of the UK economy. Monthly growth is expected to slow to 0.0% from a previous 0.1%, signaling a potential loss of momentum. A stronger print could bolster BoE hawks and support the pound, while a contraction may raise recession concerns and weigh on GBP crosses.

• U.S. CPI
The upcoming inflation report is this week’s standout macro release. Headline CPI is forecast to slow slightly from 0.3% to 0.2%, signaling a possible cooling in inflation pressures. A softer-than-expected print may revive market expectations of Fed easing, pressuring the dollar and supporting risk assets. Conversely, a hotter reading would reinforce the “higher for longer” rate stance and likely benefit the greenback.

• U.S. Initial Jobless Claims
The weekly labor market update will serve as a near-term gauge of resilience. A rise in claims could signal cooling in the labor market, enhancing speculation of a dovish Fed shift and boosting risk sentiment. Conversely, persistently low claims would reinforce the Fed’s current hawkish stance, supporting the dollar and pressuring risk assets.