Financial Market Outlook for October 31- November 4

The presidential elections are a bit over a week away and until then the markets will keep close tabs on its developments. Nonetheless, a busy week ahead with 4 central banks meetings including FOMC, BOJ, RBA and BOE. None of them, though, are expected to make any big changes. And there is the NFP report that will come out on Friday. So let’s review the main events for the week of October 31st to November 4th.

(All times GMT):

Monday, October 31st

07:00 – German Retail Sales: Retail sales declined by 0.4% in the past update and is estimated to bounce back by 0.2% in the upcoming monthly report;

10:00 – EU CPI Flash Estimate: This index estimates the yearly consumer price index of the Euro Area. Based on the recent estimate for September, the annual CPI rose to 0.4% and core CPI remained at 0.8%. The market estimates the CPI were to edge up to 0.5%;  

13:30 – U.S. core PCE: The personal consumption expenditures index is an important indicator the FOMC follows to determine the changes in the U.S. inflation. In the last report, the core PCE (excluding food and energy) edged up by 0.2%. The expectations are for the core PCE to inch up by 0.1%;

02:00 – China’s Manufacturing PMI: In the previous report, the PMI remained flat at 50.4; current estimates are for the PMI to slip to 50.3;

02:45 – China’s Caixin Manufacturing PMI: This is one of the few independent sources that provide an indication about the direction of the Chinese economy; for now it seems that the market expects a modest gain to 50.2, which isn’t far off the official manufacturing PMI;

Tuesday, November 1st

05:30 – Reserve Bank of Australia – Cash Rate Statement: In the previous meeting, RBA left, as expected, its cash rate at 1.5%; and Governor Philip Lowe isn’t expected to change rates this time again;

Tentative – Japan’s rate decision, press conference and updated outlook: In this Japanese monetary policy meeting, BOJ members will decided if it’s time to introduce more monetary stimulus. The BOJ will also release a revised economic outlook; since it’s really close to the U.S. elections and the Fed’s decision, the BOJ isn’t likely to make any big moves this time;

09:30 – GB Manufacturing PMI: In the first estimate for October, Great Britain’s manufacturing index rose to 55.4 – manufacturing is expanding at a faster pace; the market expects the PMI to slightly decline to 54.6;

13:30 – Canada’s GDP by Industry: This monthly report shows the developments in major industrial sectors for August 2016. In the previous update regarding July 2016, the real gross domestic product rose by 0.5%; this time the market expects a gain of 0.2%;

15:00 – U.S. ISM Manufacturing PMI: Back in September, the PMI bounced back to 51.5 — the manufacturing sector is rising again. And it’s estimated to further rise to 51.8 in the upcoming report, which means the manufacturing sector is expanding at a faster rate;

Wednesday, November 2nd

13:15 – ADP estimate of U.S. non-farm payroll: ADP will publish its estimate for the next U.S non-farm payroll changes for October 2016 that will be published on Friday;

15:30 – U.S Crude Oil Stockpiles Weekly update: The EIA (Energy Information Administration) will release its weekly report on the U.S oil and petroleum stockpiles for the week ending on October 28th;

19:00 –FOMC Meeting: This is one of the main event of the week. The Fed isn’t expected to raise rates this time very close to the U.S. elections; but this statement could show whether the Fed is coming closer toward raising rates in the last meeting of the year in December;

Thursday, November 3rd

13:00 –BOE Inflation Report: Bank of England will publish its quarterly report that includes the bank’s inflation outlook for 2016 and 2017;

13:00 – BOE Rate Decision & Asset Purchase Plan: The BOE isn’t expected to introduce any new policy measures but could hint of future plans in the next meetings; in this meeting the markets will look if Carney plans to stay as BOE Governor;

13:30 – U.S. Jobless Claims Weekly Report:  This weekly report will refer to the developments in the initial jobless claims for the week ending on October 28th; in the last report, jobless claims slipped to 258K;

15:00 – U.S. ISM Non-Manufacturing PMI: In the October report the PMI went sharply up to 57.1 but is expect to slide back down to 56.2;

15:00 – U.S. Factory Orders: In the last report, factory orders edged up by 0.2% during September; currently, the market expectations are for a gain of 0.2% in October;

15:30 – EIA U.S. Natural Gas Storage: The EIA weekly report of the U.S. natural gas market will refer to the recent changes in natural gas production, storage, consumption and rates as of October 28th;

Friday, November 4th

01:30 – Reserve Bank of Australia – Monetary Policy Statement: The RBA will publish its quarterly report referring to the Bank’s monetary policy;

02:30 – Australia’s Retail Sales: In the recent report for September 2016, retail sales rose by 0.4%; this time the market anticipates a gain of 0.4%;

13:30 – Canada’s Employment Report: In the latest employment update referring to September, unemployment remained at 7%; but employment rose by 67.2K;

13:30 – U.S. Non-Farm Payroll Update: In the last employment report 156K jobs were added – lower than market expectations; the U.S. unemployment rate rose to 5%. The next report is expected to show a higher number (current estimates are at 175K); and wages to rise at a monthly rate of 0.3%; if the report doesn’t beat market estimates, this could have a negative impact on the U.S. dollar and reduce again the chances of a rate hike by December;

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