Below are the most important global events likely to affect FX and bond markets in the coming week starting Nov. 4.
Tuesday's U.S. presidential election will dominate the coming week and is likely to have a significant impact on global financial markets.
Later in the week, the Federal Reserve is expected to cut interest rates again, though it is unlikely to deliver another jumbo-sized reduction. Central bank decisions are due in the U.K. and Australia, while the prospect of more fiscal stimulus in China will be closely watched.
U.S.
Tuesday's U.S. presidential election is expected to be a very tight race between Democrat Kamala Harris and Republican Donald Trump. Opinion polls show both candidates are neck and neck, but betting odds show a greater chance of victory for Trump.
Trump has pledged to implement significant trade tariffs. These are expected to boost inflation and could mean that U.S. interest rates fall by less than previously anticipated. The dollar and U.S. Treasury yields have risen recently due to the possibility of a Trump victory. Trump's support for cryptocurrencies has also lifted the price of bitcoin.
The other key event of the week will be Thursday's interest-rate decision by the U.S. Federal Reserve.
"Although the outcome of the election will have no bearing on the Fed's decision on Thursday, the winning candidate and subsequent path for fiscal policy could have implications for Fed policy next year," Investec economist Lottie Gosling said in a note.
The Fed is expected to cut interest rates again by a more usual 25 basis points, following on from the central bank's jumbo half-point reduction in September.
Money markets had previously priced a high risk of another half-point reduction either in November or December, but rate-cut expectations have been significantly trimmed back following recent solid U.S. economic data.
They will be looking for clues in the Fed's forecasts and comments as to whether rates will fall again in December.
Elsewhere, U.S. survey data will provide an up-to-date picture of how the U.S. economy is faring currently. These include Tuesday's ISM index on services activity for October and Friday's University of Michigan provisional consumer sentiment indicator for November.
U.S. factory orders data for September are due Monday, September trade figures Tuesday and weekly jobless claims Thursday.
Weak payrolls data for October reflect one-off factors related to the hurricanes that are unlikely to impact the Fed's decision, analysts said.
The Treasury will auction $58 billion in three-year notes on Monday, $42 billion in 10-year notes on Tuesday and $25 billion in 30-year bonds on Wednesday.
CANADA
Canadian jobs data for October are due Friday and could help gauge whether the Bank of Canada is likely to opt for another large half-point interest-rate cut at its next meeting. Data continue to suggest Canada's economy is struggling.
Canadian trade data for September are due Tuesday.
BRAZIL
Brazil's central bank announces a rate decision on Wednesday, where it is expected to raise the Selic rate by half a point. Citi analysts said Brazil's tight labor market and inflationary pressures from recent currency depreciation will likely push the central bank to accelerate the pace of rate hikes.
EUROZONE
German manufacturing orders data Wednesday along with industrial production data Thursday, both for September, could give further insights into the severity of the economic slump in Europe's largest economy, even if it avoided recession in the third quarter.
"Leading indicators dash hopes for a strong revival in September," as indicated in the recent slump in the purchasing managers' data on manufacturing activity and the fall in Ifo business sentiment indicator, analysts at HSBC said in a note. "Reports of many major orders have been scarce for September," they said.
Final French, German and eurozone manufacturing purchasing manager surveys are due Monday, followed by final services PMI data Wednesday. French industrial production data for September are released Tuesday.
An Ecofin meeting of EU finance ministers is scheduled for Tuesday.
Austria will hold a bond auction on Tuesday, Germany on Wednesday and Spain and France on Thursday. Germany's offer includes May 2041- and August 2046-dated Bunds.
U.K.
The Bank of England is expected to cut interest rates by 25 basis points to 4.75% in a decision Thursday.
"We expect a second 25 basis-point rate cut from the BOE [in 2024], signaling the need for ongoing gradual easing," Nomura Research analysts said in a note.
Markets price in an 85% probability of a 25 basis-point cut, LSEG Refinitiv data show.
Some analysts say the BOE could slow the pace of interest rate cuts following the announcement of increased borrowing and investment at the recent budget. The Office for Budget Responsibility revised up its inflation forecast for 2025 as a result.
This could put pressure on the BOE to keep interest rates higher, AJ Bell's Laith Khalaf said in a note.
Final purchasing managers' data on services activity in October are due Tuesday.
The U.K. Debt Management Office will auction the July 2034 gilt Tuesday.
SCANDINAVIA
Sweden's Riksbank and Norway's Norges Bank both announce interest-rate decisions on Thursday.
The Riksbank is expected to cut interest rates. Most analysts expect a reduction by a large 50 basis points, taking the key rate down to 2.75%, due to continued evidence of a weak Swedish economy. A smaller 25 basis-point cut is possible, however.
Analysts at ING expect a half-point rate cut but said the Riksbank "will probably try to avoid sending the signal that 50 basis-point moves are the new normal."
In contrast, Norges Bank is expected to continue to keep its key rate on hold at 4.50%. However, it could open the door to a possible interest-rate cut in December, analysts said.
POLAND
Poland's central bank announces an interest-rate decision on Wednesday and is expected to keep the base rate on hold at 5.75% as inflation in the country remains elevated.
CZECH REPUBLIC
The Czech central bank announces an interest-rate decision on Thursday, where a 25 basis-point rate cut is likely in order to prop up the economy.
AUSTRALIA & NEW ZEALAND
The Reserve Bank of Australia is widely expected to keep the official cash rate on hold at 4.35% on Tuesday - marking a full year that the rate has been at this level - with recent third-quarter inflation data lacking the necessary trigger for a cut.
The strength of services inflation and the fact that core inflation remains stubbornly above the RBA's 2% to 3% target means that most economists are looking well into next year for the start of an easing cycle.
RBA Governor Michele Bullock will give a press conference after the policy meeting, with interest focused on whether the board of the central bank discussed the possibility of a further interest rate rise.
Bullock's use of language will be the main talking point after she said last month that the board didn't explicitly talk about an interest rate increase, something that some economists took as a dovish pivot.
Meanwhile, Australia's job market is roaring as hiring for government positions continues to boom, keeping the unemployment rate low, and the RBA away from rate cuts.
The RBA will also publish new economic forecasts on Tuesday that are likely to show the central bank still expects inflation to remain a concern.
Financial market pricing now implies the RBA won't start cutting interest rates until May, well behind other major central banks.
JAPAN
Despite growing expectations for an imminent rate increase by the Bank of Japan, economic indicators might send mixed signals for the formation of a positive cycle of growth in incomes and consumption.
Monthly wage data, scheduled for Thursday, could show a recovery in real wages for September as inflation slowed during the month thanks to energy subsidies.
But another key component of the virtuous circle may keep struggling. Household spending due Friday is expected to have declined 2.1% in September from a year earlier, according to a poll of economists by data provider Quick. That would be weaker than a 1.9% drop in August, indicating that Japanese consumers remain hesitant to spend due to higher prices.
Investors will also seek hints for the Bank of Japan's next move in the minutes of its Sept. 19-20 meeting scheduled to be released Wednesday. At that meeting, the central bank maintained its policy interest rate at 0.25%, as widely expected.
The Ministry of Finance is scheduled to auction 2.6 trillion yen ($17 billion) of 10-year Japanese government bonds on Thursday. Market participants will likely monitor the auction's outcome for any signs of interest from domestic investors following the BOJ's latest monetary-policy meeting in October.
CHINA
China's top legislative body will gather for a five-day meeting this week. Markets hope for a blockbuster fiscal package aimed at the economy's weak spots. But optimists have been burned before and there is a higher degree of skepticism this time around.
The Standing Committee of the National People's Congress meets Monday and state media will likely report its decisions Friday.
There will be data to digest too, with trade and inflation figures for October due on Thursday and Saturday, Nov. 9, respectively.
After some glimmers of positive momentum appeared in housing sales data and PMI surveys, markets will want to see further evidence that China's torrent of stimulus is finally jolting the economy awake.
HSBC economists expect China's trade surplus to have fallen sharply as external demand weighed on exports. Growth in outbound shipments likely stayed relatively robust nonetheless, flattered in part by a low base. The economists think stimulus has boosted market confidence, which may provide some improvement in domestic demand. They predict imports growth to have edged up as a result
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11-01-24 1226ET
