Key events in developed markets

The US economic calendar is light over the coming week with housing figures the main point of interest. The housing sector has performed well in recent months, supported by the strong jobs market, robust consumer confidence and plunging mortgage rates. As such, we look for continued improvements that will cement expectations for a “no change” outcome at the 11 December Federal Open Market Committee meeting. Furthermore, we expect the minutes to the 30 October FOMC meeting to reinforce the message that Fed officials want to take stock of the impact from the three consecutive rate cuts seen in July, September and October.

The Bank of Canada has suggested that it is becoming increasingly open to the idea of an interest rate cut. Their preference would be for fiscal policy to be loosened given interest rates are already low and the efficacy of rate cuts is questionable. Nonetheless, if downside growth risks do materialise they are prepared to act. This week’s numbers include inflation, which is likely to remain broadly in line with target, and retail sales, which have fallen in three out of the past four months. A fourth fall in five months would heighten the chances of a 4 December rate cut, although the BoC have suggested 3Q GDP on 29 November will be key.

The eurozone focus will be on survey data. Surveys indicated that the manufacturing recession continued in October while consumer confidence had also declined markedly. November data has the potential to improve as optimism about trade developments already lifted investor sentiment earlier in the month. Information on current developments like incoming new orders will be especially closely watched.