US Election, Fed & BoE Policy: Key Economic Data Focus


US Election, Fed & BoE Policy: Key Economic Data Focus

This week the focus will lie on the US Presidential Election, policy announcements on Fed, BoE, RBA, and US ISM Services PMI data will also be key.

Major data and Events scheduled this week

Tuesday

US Presidential Election

On Tuesday, November 5th, Americans vote in a closely contested presidential election between Donald Trump and Kamala Harris. National polls slightly favor Harris, but swing states and betting markets lean towards Trump, who has gained momentum recently.

FiveThirtyEight gives Trump a 52% chance and Harris 48%, while pollster Nate Silver has it at 54% to 46%. Republicans are expected to win the Senate, with the House nearly tied. Key swing states like Pennsylvania could determine the outcome. Markets are watching the Dollar, with a Trump victory and Republican control likely boosting the currency, impacting Commodity FX, the Yuan.

RBA Policy Announcement (Tue):

The RBA is expected to hold the Cash Rate at 4.35% in its upcoming meeting, with markets pricing a 96% chance of no change. In its last meeting, the RBA kept rates steady and maintained a hawkish tone, stressing its commitment to bringing inflation back to target. Inflation remains above the 2-3% target range, with a sustainable return not expected until 2026. The Board remains data-dependent, assessing risks before deciding on any future moves.

ISM Services PMI

Analysts expect October’s ISM services PMI to dip to 53.3 from 54.9. In contrast, S&P Global’s PMI showed services rising to a two-month high of 55.3, driven by strong domestic demand and new business growth. Sector optimism hit a 16-month high with minimal job cuts.

Wednesday

Brazil’s central bank Policy Announcement

Brazil’s central bank is expected to raise the Selic rate by 50bps to 11.25% in November after a 25bps hike in September, driven by strong economic activity and tight labor markets. Economists expect the Selic to reach 11.75% by year-end, then ease to 11.25% by end-2025, contrasting with easing trends in the US and Europe.

Thursday

BoE Policy Announcement

The BoE is unanimously expected to cut its Base Rate by 25bps to 4.75% next week, with an 83% market-priced probability. Recent UK budget impacts have lifted yields due to growth and borrowing concerns, but this likely won’t affect the BoE’s decision. Inflation has dipped below target for the first time since 2021, and PMIs show weaker services and manufacturing.

FOMC Policy Announcement

The FOMC will announce its policy on Thursday, November 7, following the presidential election. Polls favor Harris, but betting markets lean toward Trump, whose policies could increase inflation risks. Analysts expect the Fed to cut rates by 25bps in November to 4.50-4.75%, with a likely additional 25bps cut in December.

Happy Trading!

Commodity Samachar Securities
We Decode the Language of the Markets

Also Read: Dollar Weakens Ahead of U.S. Election and Fed Rate Cut , What to expect in Great British Pound apost UK budget?

Recommended Read: Trader’s Guide: Could You Profit from 2024’s Silver and Gold Price Fluctuations?

Want Help On Your Trades ?

Chat with RM