Highlights
This week, the Reserve Bank of Australia is widely expected to stand pat at its Nov. 4-5 meeting as its policymakers continue to watch for evidence that inflation is moving sustainably towards the bank's target range of 2% to 3%.
For its part, the Bank of England is forecast to lower the Bank Rate by 25 basis points to 4.75% on Nov. 7, possibly in a tight vote, in light of lower economic growth and easing inflation.
After its Nov. 6-7 meeting, the Federal Open Market Committee is expected to trim the fed funds target rate by 25 basis points to a range of 4.50% to 4.75% after slashing it by 50 basis points to 4.75% to 5.00% in September. The Federal Reserve is trying to prevent the labor market from cooling too fast while ensuring inflation is stable around its 2% target over the long run.
In Monday's data, U.S. factory orders are expected to slip 0.5% for the second straight monthly drop in September after dipping 0.2% in August and surging 4.9% in July. Institute for Supply Management data showed that manufacturing activity was in contraction for a seventh straight month in October as firms remain reluctant to invest in new capacity on concerns that federal fiscal policy could be inflationary whichever major party wins the Nov. 5 election.
U.S. motor vehicle sales are seen essentially flat at a 15.7 million unit rate in October versus 15.8 million in September.
South Korean inflation remains muted, with CPI expected to rise 0.3% rise on the month in October after a 0.1% gain in September and 1.4% on the year, easing further form 1.6% in September and 2.0% in August, staying the slowest increase since +1.4% in February 2021. The Bank of Korea is expected to conduct more rate cuts in coming months. At its Oct. 11 meeting, the bank lowered its policy interest rate by 25 basis points to 3.25% after having left it at a restrictive level of 3.50% for 13th consecutive meetings.
In China, the Caixin PMI data is forecast show the composite index stayed above the neutral line of 50 at 50.4 in October, little changed from 50.3 in September. while the services PMI was also stable at 50.5, up slightly from 50.3. Last week, the manufacturing index popped above the key line, improving to a higher-than-expected 50.3 in October from 49.3 in September.
Despite easing inflation, the Reserve Bank of Australia is expected to leave its policy rate unchanged at 4.35% for an eighth straight meeting after raising it by 25 basis points to the current level in November 2023. In its Sept. 24 statement, the bank noted that while headline inflation will decline for a time, underlying inflation remains too high. Given upside risks to inflation, the bank calls for a sufficiently restrictive policy stance until the board is confident that inflation is moving sustainably towards the target range of 2% to 3%.
Governor Michele Bullock told reporters that inflation, at 3.8% in the June quarter, is above the bank's target and remains sticky but also said, We didn't explicitly consider an interest rate rise. The board discussed what we would need to see to go either a raise in interest rates or a lowering in interest rates. Since then, the annual inflation rate moderated to 2.8% in the July-September quarter. In monthly CPI data, inflation continued easing to 2.1% in September from 2.7% in August.
For its part, the Bank of England is forecast to lower the Bank Rate by 25 basis points to 4.75% on Nov. 7, possibly in a tight vote, in light of lower economic growth and easing inflation.
After its Nov. 6-7 meeting, the Federal Open Market Committee is expected to trim the fed funds target rate by 25 basis points to a range of 4.50% to 4.75% after slashing it by 50 basis points to 4.75% to 5.00% in September. The Federal Reserve is trying to prevent the labor market from cooling too fast while ensuring inflation is stable around its 2% target over the long run.
In Monday's data, U.S. factory orders are expected to slip 0.5% for the second straight monthly drop in September after dipping 0.2% in August and surging 4.9% in July. Institute for Supply Management data showed that manufacturing activity was in contraction for a seventh straight month in October as firms remain reluctant to invest in new capacity on concerns that federal fiscal policy could be inflationary whichever major party wins the Nov. 5 election.
U.S. motor vehicle sales are seen essentially flat at a 15.7 million unit rate in October versus 15.8 million in September.
South Korean inflation remains muted, with CPI expected to rise 0.3% rise on the month in October after a 0.1% gain in September and 1.4% on the year, easing further form 1.6% in September and 2.0% in August, staying the slowest increase since +1.4% in February 2021. The Bank of Korea is expected to conduct more rate cuts in coming months. At its Oct. 11 meeting, the bank lowered its policy interest rate by 25 basis points to 3.25% after having left it at a restrictive level of 3.50% for 13th consecutive meetings.
In China, the Caixin PMI data is forecast show the composite index stayed above the neutral line of 50 at 50.4 in October, little changed from 50.3 in September. while the services PMI was also stable at 50.5, up slightly from 50.3. Last week, the manufacturing index popped above the key line, improving to a higher-than-expected 50.3 in October from 49.3 in September.
Despite easing inflation, the Reserve Bank of Australia is expected to leave its policy rate unchanged at 4.35% for an eighth straight meeting after raising it by 25 basis points to the current level in November 2023. In its Sept. 24 statement, the bank noted that while headline inflation will decline for a time, underlying inflation remains too high. Given upside risks to inflation, the bank calls for a sufficiently restrictive policy stance until the board is confident that inflation is moving sustainably towards the target range of 2% to 3%.
Governor Michele Bullock told reporters that inflation, at 3.8% in the June quarter, is above the bank's target and remains sticky but also said, We didn't explicitly consider an interest rate rise. The board discussed what we would need to see to go either a raise in interest rates or a lowering in interest rates. Since then, the annual inflation rate moderated to 2.8% in the July-September quarter. In monthly CPI data, inflation continued easing to 2.1% in September from 2.7% in August.
Definition
Market Focus details key factors in the coming day that will impact the economic outlook and the financial markets. These include central bank events, economic indicators, policymaker speeches as well as expected political and corporate developments.
Description
Keeping up-to-date with event schedules and the economic calendar is key to understanding the global financial system. Econoday's Market Focus allows investors and policymakers to carefully track what will be making news and moving the financial markets in the coming day.
