Following are five big themes likely to dominate thinking of investors and traders in the coming week and scheduled events.
1/ WHEN TO TAPER
With a U.S. default avoided, for now, financial markets are once again focused on when the Federal Reserve will begin to scale back its stimulus. Whether they bet on December tapering will depend on how the backlog of delayed U.S. data looks. If the government shutdown has taken a toll on the economy, bets on tapering may shift out to at least the first quarter of 2014. In the meantime, stock markets across the world are binging on stimulus and the dollar is looking peaky.
* Washington budget battle may delay Fed taper until 2014
* Fed needs "couple of meetings" before cutting QE3
* Debt fight dings U.S. Treasury bills' status
2/ RUNNING THE NUMBERS
While the U.S. data deluge, including September's jobs report originally due on Oct. 4 and now slated for Oct. 22, will be closely watched, plenty more clues to the state of the global economy are due in the coming week. Global flash PMIs are due on Thursday and one focus will be whether Europe has maintained its recent recovery. Britain is the first Group of Seven country to release third-quarter growth data and this, along with Bank of England minutes, will be scrutinized for any clues to the timing of the BoE's first rate hike. Some see rates rising as soon as next year, in contrast to the bank's recent guidance of 2016.
* Washington becomes biggest risk to U.S. economy
* Global PMIs due Thursday, German Ifo index due Friday
* UK third-quarter flash GDP data due Friday
* Bank of England minutes due Wednesday
3/ EARNINGS WARNINGS
European corporate earnings have disappointed over the past two quarters, and the early signs from the latest reporting season offer little cause to suspect that trend is about to turn. Profit warnings across sectors are prompting analysts to cut full-year earnings estimates again. The key question for investors, with some 400 companies due to report in the coming week, is whether markets can continue to push higher despite the earnings misses, as they have done so far this year. Key factors will include the strength of demand from China and the timing of any Fed tapering.
* Earnings prospects dim in Europe as warnings mount
* European firms face share price pain from China
* European/U.S. earnings diaries
4/ SQUEEZED VOLUMES
One consequence of the U.S. fiscal impasse has been a reduction in trading volumes across financial markets. Some banks have already warned of a hit to their third-quarter revenues and this will be a theme as the earnings season gathers pace. Nordic banks report in the coming week, followed by Credit Suisse on Thursday and Deutsche and UBS the week after.
* Trading volumes take a hit from U.S. impasse, to hurt banks
* Foreign central banks scoop up Treasuries during debt ceiling fight
* SEB, Swedbank results Tues, Nordea Weds, Credit Suisse, Santander Thurs
5/ SOFT DOLLAR
The dollar's sell-off is likely to gather pace in the coming week, with weakness particularly pronounced against growth-linked currencies. U.S. bond yields have fallen and spreads between Treasuries and both German Bunds and UK gilts are moving unfavorably for the dollar. Implied volatilities are also low and with the Fed set to pump $85 billion a month into the economy at least until December, carry trades are likely to gather steam having under performed for most of the year. Also this week, policy decisions from the Swedish and Norwegian central banks will drive their respective currencies as UK GDP will the British pound.
* Dollar, default and Bretton Woods III
* Debt deal may encourage Asia's dollar craving
* Canadian, Turkish central bank decisions on Wednesday; Swedish, Norwegian central bank decisions on Thursday.