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High-stakes economic data set to steer global markets this week
Key global data and U.S. election updates drive markets this week, may signal potential central bank shifts
U.S. GDP, inflation, and jobs data under market focus
Eurozone eyes Q3 GDP and inflation for ECB direction
BOJ expected to hold rates steady amid inflation goals
This week, investors are preparing for a wave of crucial economic data from major economies, which will play a significant role in shaping financial market sentiment. The upcoming U.S. presidential election on November 5 adds an additional layer of uncertainty. Any unanticipated developments could provoke substantial market volatility, making it essential for market participants to monitor these events closely.
In the United States, attention will focus on a suite of critical indicators, including Q3 GDP growth, the PCE inflation gauge, the ISM Manufacturing Index, and the October non-farm payrolls report. With the Federal Reserve increasingly prioritizing labor market conditions as part of its dual mandate, the employment data will likely carry significant weight. Current market consensus points toward a 25 basis-point rate cut at the Fed’s November and December meetings, though these expectations could shift based on this week’s data releases.
Eurozone: Inflation and growth figures under scrutiny
The Eurozone will release its preliminary Q3 GDP estimate and October CPI figures. With a spectrum of European Central Bank (ECB) officials expressing varying degrees of support for further rate cuts, there is ongoing debate about whether to pursue a 25 or 50 basis-point reduction in December. Ultimately, the ECB's decision will likely hinge on the extent of economic slowdown reflected in the GDP data and the inflation trajectory.
Japan’s BOJ may hold steady as economic projections are updated
Japan's central bank, the Bank of Japan (BOJ), is expected to maintain its current monetary stance during its upcoming policy meeting. The BOJ's revised economic projections will be closely examined to assess the central bank's confidence in sustainably achieving its 2% inflation target. The updated outlook will be critical in determining the timing for any potential rate hike.
Australia: CPI data could signal policy shift in 2025
Australia's Q3 CPI data is anticipated to be pivotal for the Reserve Bank of Australia (RBA) as it considers future rate policy. Should the inflation report indicate a softer reading, the RBA may feel increased flexibility to pivot toward easing, with a potential rate cut on the horizon in early 2025. Additionally, given Australia's strong economic linkages with China, the release of China's PMI data will provide further insights into the efficacy of recent government stimulus measures announced in September.
