China rate decision and the Bank of Canada (BoC) take center stage this week, with investors on edge. U.S. and European PMI data will also be key movers. All eyes are on the BoC, expected to slash rates, which could shake markets and hit the Canadian dollar. Buckle up for a thrilling week!
Important data and event to watch this week – China rate, Global PMI, BOC Rate
CHINA
Markets are digesting China’s latest stimulus measures, focused on boosting the property sector, which remains a drag on the economy. Attention is on Monday’s People’s Bank of China (PBOC) loan prime rate announcement, with further monetary easing expected.
On Friday, the PBOC will announce the medium-term lending facility rate, possibly injecting more liquidity. China’s September industrial profit data will be released on Sunday, October 27.
JAPAN
In Japan, investors will focus on Tokyo’s consumer-price data due Friday, with expectations that core inflation rose 1.7% in October, down from 2.0% in September. The Bank of Japan (BOJ) may raise rates soon, and Governor Kazuo Ueda will speak at an IMF event on Wednesday. The BOJ’s semi-annual financial system report will be released Thursday. Key auctions for climate-transition and long-term Japanese government bonds (JGBs) are also scheduled, with investors watching demand for the 20-year JGB issue.
CANADA
The Bank of Canada’s (BoC) update on Wednesday at 1:45 pm GMT is a key risk event. Investors expect a 97% chance of a 50bp rate cut, following weaker-than-expected inflation in September. This would be the BoC’s fourth consecutive cut, bringing the overnight rate to 3.75%. A 50bp cut would widen the rate gap with the Fed by 125bps, potentially pressuring the Canadian dollar (CAD).
U.K.
U.K. provisional purchasing manager indexes on manufacturing and services sector activity in October are due Thursday. Analysts at 51.5 from the pervious 51.5.
Any weakness in the data could add to the prospect of more rapid interest-rate cuts by the Bank of England, however. Faster rate cuts look more possible after recent weaker-than-expected U.K. inflation data and after BOE Governor Andrew Bailey said rate-setters could become “a bit more aggressive” with cutting interest rates if consumer prices continued to decline.
Public finances data for September are released Tuesday and GfK’s consumer confidence indicator for October on Friday.
Eurozone
Eurozone provisional PMI data for manufacturing and services in October will be released Thursday, with weak numbers potentially fueling expectations of faster ECB rate cuts. The data is foreseen at 45.1 from previous 45 and 51.5 from previous 51.4, respectively.
The ECB recently cut rates by 25 basis points, and more signs of economic strain could prompt further easing. Consumer confidence data for the Eurozone, France, Germany, and Italy are due throughout the week. Bond auctions in Slovakia, Belgium, Italy, and Germany are also scheduled, with Germany launching new Schatz notes and reopening Bunds.
US
U.S. provisional PMI surveys on Thursday will offer insights into manufacturing and services activity. The data is foreseen at 47.5 from previous 47.3 and 55 from previous 55.2, respectively. Strong recent data, like retail sales, have lowered expectations for large Federal Reserve rate cuts, with markets now anticipating smaller 25 basis-point reductions in November and December.
Key reports this week include existing-home sales on Wednesday, new home sales on Thursday, and durable goods orders on Friday. Treasury auctions of 20-year bonds and five-year inflation-protected Treasurys will also be watched.
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