Week Ahead

All eyes turn to the Federal Reserve’s policy statement due Wednesday, as well as the US jobs report on Friday, which will probably point to another month of employment gains. Elsewhere, the earnings season continues, with Pfizer, Moderna, Airbnb and Uber due to report their quarterly results. Worldwide PMI surveys will also be in the spotlight, as well as monetary policy action by central banks in the UK, Australia, Malaysia, Poland and Norway. Other releases include trade figures for the US, Canada, China, India and Australia, key factory data for Germany, France and Brazil, and GDP updates for Hong Kong and Indonesia.

The US Federal Reserve is expected to announce next week its plan for scaling back its massive bond buying scheme, while investors will be looking for any clues about when the central bank will begin raising interest rates to curb price pressure.

On the economic data front, the US jobs report should point to an acceleration in employment growth, with markets predicting a payroll increase of 425 thousand in October, compared with September’s nine-month low of 194 thousand, while the unemployment rate is seen falling to a pandemic low of 4.7 percent. The labor market has been gradually recovering in recent months, helped by a surge in demand for labor, the expiration of enhanced jobless benefits, and record levels of job openings and quits by employees. Elsewhere, the ISM PMI surveys for October should point to strong growth rates in both manufacturing and services sectors. Other notable publications are foreign trade, factory orders, construction spending, ADP employment change, third-quarter productivity, IBD/TIPP Economic Optimism, and the final readings of Markit PMIs.

On the corporate front, the third-quarter earnings season continues, with reports to watch including Pfizer, Moderna, Qualcomm Inc, Airbnb, and Uber.

Elsewhere in America, key data to follow include Canada employment figures, trade balance, and Ivey and Markit PMI figures; Mexico business and consumer morale, and Markit Manufacturing PMI; and Brazil foreign trade, industrial production, and Markit PMIs.

Across the Atlantic, the Bank of England will probably leave monetary policy unchanged, with all eyes turning to the summary and minutes of the meeting after Governor Bailey said in October that policymakers would have to act to tame the inflation threat. Currency traders priced in a rate increase still this year and the sterling would be hard hit if the central bank signals otherwise. Key data to follow include final Markit PMIs, Halifax house price index and new car sales.

Elsewhere in Europe, investors will keep an eye on the final Markit PMI surveys for the Euro Area, Germany and France while Italy and Spain will publish their preliminary estimates. The Euro Area unemployment rate is seen falling further to 7.4% in September, the lowest level since April 2020, and retail sales likely rose for a second consecutive month. Other data to follow include: Euro Area producer prices; Germany industrial production and factory orders; Switzerland inflation rate, retail trade and consumer confidence; and Turkey consumer and producer prices. Meanwhile, Poland will probably be raising interest rates by 25bps on Wednesday and the Norges Bank is seen holding interest rates at current levels when it meets on Thursday.

In China, traders will turn their attention to trade balance and Caixin PMI updates for October, with forecasts pointing to a slight contraction in factory activity. Meanwhile, the Reserve Bank of Australia will hold its monetary policy meeting, but no changes are expected. On the economic data front, key data to watch for include Ai Group manufacturing, construction and services indexes, trade balance, building permits, and home loans. Elsewhere, Japan’s household spending and India’s flash estimate of foreign trade and Markit PMIs will be in the spotlight.

Other highlights for the Asia-Pacific region include: New Zealand employment figures; South Korea inflation, current account and Markit manufacturing PMI; Hong Kong and Indonesia third-quarter GDP data; and Thailand, Indonesia and the Philippines inflation rates. Policymakers in Malaysia are seen holding interest rates at record-low levels.

Categories: Markten