MNI Global Week Ahead - US Election, Fed, BoE and More
MNI (LONDON) - See below for the key events in developed and emerging markets next week:
Developed Markets
On November 5 the United States will hold elections for the country’s presidency, 34 seats in the United States Senate, the entirety of the House of Representatives, and a plethora of state and local-level offices. The race between Democratic Party nominee, Vice President Kamala Harris, and Republican Party nominee, Donald Trump, is poised on a knife edge after President Joe Biden withdrew from the race in July, amid pressure from senior Democrats and the liberal press for an underwhelming presidential debate performance. Since the switch at the top of the Democrat ticket, the race has seen some of the tightest polling in modern US history with the seven states most likely to determine the Electoral College result – the so-called ‘swing states’ - consistently polling within the margin of error. As polling falls within the margin of error in the key swing states, a polling miss could result in a comfortable win for either candidate, depending on the direction of the miss. Republicans running on a map that offers few pickup opportunities for Democrats are favoured to win the Senate. The House of Representatives is a toss-up that may fall to the party that wins the White House.
TUESDAY - RBA Decision
The RBA is widely expected to leave rates unchanged at 4.35% at its meeting on November 5, which will include updated staff forecasts. Underlying inflation printed broadly as expected in Q3 but remains above the top of the target band at 3.5%, and domestically-driven services picked up. In addition, the labour market has shown few signs recently of further easing. With an unchanged outcome expected, the statement will be scrutinised for signs that the Board is becoming more comfortable that inflation will sustainably return to target or if it needs to see more evidence.
THURSDAY - Riksbank Decision
A string of soft domestic activity data has shifted consensus towards a 50bp Riksbank cut in November, with markets tilted heavily towards that outcome. The door was opened to a 50bp cut in the September policy statement, which noted that rates would likely be cut in November and December “if the outlook for inflation and economic activity remains unchanged”, with a 50bp cut “possible at one of these meetings”. Although Governor Thedeen said in the September press conference that 25bp cut increments were the baseline scenario, he also flagged that 50bp moves would be consistent with a “gradual” pace of easing. We think there is enough of a case for a 50bp cut to be delivered. The inflation outlook continues to appear consistent with the Riksbank’s 2% target, and growth concerns remain prevalent both domestically and in the Eurozone.
THURSDAY - Norges Bank Decision
Norges Bank is unanimously expected to keep the policy rate on hold at 4.50%, with the policy guidance likely to remain cautious once again. The September decision was a little more hawkish than expected, with the September MPR rate path seeing only a small downward revision and assigning just a ~20% implied probability of a 25bp cut in December (but a near certainty of such a move by the end of Q1 2025). The policy statement noted that rates would likely remain at current levels through this year, before “being gradually reduced from 2025 Q1”. We think this rhetoric is likely to remain unchanged in November, with the December meeting (and its associated forecast updates) a more appropriate time to signal a tilt in stance.
THURSDAY - BOE Decision
We don't think the UK's more inflationary-than-expected Autumn budget will impact the November MPC meeting. We still expect a 25bp cut with the Bank’s communication continuing to reference “gradual” cuts and little additional guidance pointing to specific meetings. However, it will be interesting to see how the Bank of England’s new forecasts incorporate the Budget measures. The Bank’s guidance noted that the Budget measures “will be incorporated in the November Monetary Policy Report projections” despite the tight turnaround between the Budget and next week’s MPC meeting. On balance, these measures make sequential cuts less likely, in our view.
THURSDAY - Fed Decision
The FOMC is on course to cut the Fed funds rate by 25bp on Thursday November 7, as it takes another step in paring back policy restraint. The Fed’s base case in September was for another 25bp in cuts in each of November and December, following on from the half-point cut in September – a sentiment reiterated by Chair Powell in late September when he said that the Dot Plot was a good guide to policy for the rest of 2024. Stronger-than-expected activity and labor market data subsequently have removed a second consecutive 50bp cut from the conversation, but a soft if distorted October payrolls report - and importantly, downward revisions to the prior months - cemented that November would see a cut and not a "skip". Given that Powell has re-endorsed the September Dot Plot as the best guide to policy, we would expect him to have to address whether it’s still current as of November 7. A hawkish reply would involve him setting up a “skip” in December, whereas a simple reiteration that the SEP still states the base case would be taken dovishly. We don’t expect any revelations in the Statement, where changes may be limited to the first paragraph’s description of current economic conditions. And whatever the result of the election two days prior, expect Powell to fend off any questions over the implications of the election for monetary policy, and reiterate the importance of the Fed’s political independence.
Emerging Markets
WEDNESDAY - BNM Decision (Malaysia)
Market consensus is that the BNM will remain on hold. It seems sensible to suggest that given the strength of GDP growth and focus on the US Presidential Election and China's Nationap People's Congress meeting, there is limited reason for the BNM to alter its course for monetary policy. At the most recent BNM meeting in September the Central Bank kept rates on hold citing forward looking indicators suggested a sustained period of strong economic activity would be supported by resilient domestic expenditure and higher export activity.
WEDNESDAY - NBP Decision (Poland)
The release of an updated inflation and GDP projection should be the highlight of next week's monetary policy meeting, which is widely expected to yield another on-hold decision, as inflation running at twice the target rate prevents the MPC from loosening policy. The central bank's in-house forecasts are typically a major point of reference for the MPC, with Governor Glapinski signalling last month that "we will have more clarity about where the MPC is headed thanks to the November projection." The consensus view is that the NBP will hold off on cutting rates until inflation starts cooling down in 2025.
WEDNESDAY - BCB Decision (Brazil)
Both consensus estimates, and market pricing suggest the BCB will deliver a 50bp Selic rate hike to 11.25%, after initiating a short tightening cycle in September. Inflation expectations continue to drift higher and together with the ongoing BRL depreciation, the central bank will be justified in stepping up the tightening pace. Resilient economic growth, tight labour market conditions and fiscal uncertainties would also justify a more hawkish tone in the accompanying statement.
THURSDAY - CNB Decision (Czechia)
The CNB will likely continue to cut rates at the standard 25bp/meeting pace, extending the "fine tuning" phase of this monetary policy cycle. There has been some dissonance in rhetoric from different CNB officials, as outgoing Bank Board member Tomas Holub outlined a case for more aggressive cuts, while Deputy Governor Eva Zamrazilova signalled that she could consider a pause in monetary easing. Against this backdrop, another cautious, standard-sized cut, which would still keep the repo rate above its neutral level, seems to be the most likely scenario.
THURSDAY - BCRP Decision (Peru)
Initial analyst estimates suggest the outcome of the November BCRP is not certain. Lower-than-expected October inflation data would support the MPC opting to deliver another 25bp reference rate cut, however, the close proximity to the US election and the hawkish repricing across global FI markets might tilt the BCRP to maintain rates at 5.25%, as it did in October.
Date | GMT/Local | Impact | Country | Event |
04/11/2024 | - | GB | Bank of England Meeting | |
04/11/2024 | - | AU | Reserve Bank of Australia Meeting | |
04/11/2024 | 0700/0200 | * | TR | Turkey CPI |
04/11/2024 | 0815/0915 | ** | ES | S&P Global Manufacturing PMI (f) |
04/11/2024 | 0845/0945 | ** | IT | S&P Global Manufacturing PMI (f) |
04/11/2024 | 0850/0950 | ** | FR | S&P Global Manufacturing PMI (f) |
04/11/2024 | 0855/0955 | ** | DE | S&P Global Manufacturing PMI (f) |
04/11/2024 | 0900/1000 | ** | EU | S&P Global Manufacturing PMI (f) |
04/11/2024 | - | EU | ECB's Lagarde and Cipollone in Eurogroup meeting | |
04/11/2024 | 1330/1430 | EU | ECB's Elderson speech at '10 years of SSM' conference | |
04/11/2024 | 1400/1500 | EU | ECB's Elderson in panel 'Achievement...and the outlook' | |
04/11/2024 | 1500/1000 | ** | US | Factory New Orders |
04/11/2024 | 1530/1030 | CA | BOC market participants survey | |
04/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
04/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for 13 Week Bill |
04/11/2024 | 1800/1300 | *** | US | US Note 03 Year Treasury Auction Result |
05/11/2024 | 0330/1430 | *** | AU | RBA Rate Decision |
05/11/2024 | 0645/0745 | ** | CH | Unemployment |
05/11/2024 | 0745/0845 | * | FR | Industrial Production |
05/11/2024 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
05/11/2024 | - | EU | ECB's De Guindos participate in ECOFIN Meeting | |
05/11/2024 | - | US | US Presidential Election | |
05/11/2024 | 1330/0830 | ** | US | Trade Balance |
05/11/2024 | 1330/0830 | ** | CA | International Merchandise Trade (Trade Balance) |
05/11/2024 | 1355/0855 | ** | US | Redbook Retail Sales Index |
05/11/2024 | 1430/1530 | EU | ECB's Lagarde speech at French Competition Authority's event | |
05/11/2024 | 1500/1000 | *** | US | ISM Non-Manufacturing Index |
05/11/2024 | 1630/1130 | * | US | US Treasury Auction Result for Cash Management Bill |
05/11/2024 | 1800/1300 | ** | US | US Note 10 Year Treasury Auction Result |
05/11/2024 | 1830/1330 | CA | BOC Minutes (Summary of Deliberations) | |
05/11/2024 | 1830/1930 | EU | ECB's Schnabel speech on Macroeconomic Policy | |
06/11/2024 | - | SE | Riksbank Meeting | |
06/11/2024 | 0700/0800 | ** | DE | Manufacturing Orders |
06/11/2024 | - | US | FOMC Meeting / S.E.P. | |
06/11/2024 | 0930/0930 | ** | GB | S&P Global/CIPS Construction PMI |
06/11/2024 | 1000/1100 | ** | EU | PPI |
06/11/2024 | 1200/0700 | ** | US | MBA Weekly Applications Index |
06/11/2024 | 1400/1500 | EU | ECB's Lagarde address at 10th anniversary of Single Supervisory Mechanism | |
06/11/2024 | 1430/1530 | EU | ECB's De Guindos speech and Q&A at Distinguished Speaker Seminar | |
06/11/2024 | 1500/1000 | * | CA | Ivey PMI |
06/11/2024 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
06/11/2024 | 1725/1225 | CA | BOC Sr Deputy Rogers speech in Toronto. | |
06/11/2024 | 1800/1300 | *** | US | US Treasury Auction Result for 30 Year Bond |
07/11/2024 | 2330/0830 | ** | JP | average wages (p) |
07/11/2024 | - | NO | NorgesBank Meeting | |
07/11/2024 | 0030/1130 | ** | AU | Trade Balance |
07/11/2024 | 0700/0800 | ** | DE | Trade Balance |
07/11/2024 | 0700/0800 | ** | DE | Industrial Production |
07/11/2024 | 0700/0800 | SE | Flash CPI | |
07/11/2024 | 0800/0900 | ** | ES | Industrial Production |
07/11/2024 | 0810/0910 | EU | ECB's Schnabel remarks at Money Market conference | |
07/11/2024 | 0830/0930 | *** | SE | Riksbank Interest Rate Decison |
07/11/2024 | 0830/0930 | ** | EU | S&P Global Final Eurozone Construction PMI |
07/11/2024 | 0900/1000 | *** | NO | Norges Bank Rate Decision |
07/11/2024 | 1000/1100 | ** | EU | Retail Sales |
07/11/2024 | 1045/1145 | EU | ECB's Elderson in panel on climate leadership | |
07/11/2024 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
07/11/2024 | - | *** | CN | Trade |
07/11/2024 | 1200/1200 | *** | GB | Bank Of England Interest Rate |
07/11/2024 | 1230/1230 | GB | BoE Press Conference | |
07/11/2024 | 1330/0830 | *** | US | Jobless Claims |
07/11/2024 | 1330/0830 | ** | US | Preliminary Non-Farm Productivity |
07/11/2024 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
07/11/2024 | 1330/1430 | EU | ECB's Lane speech on Public Debt | |
07/11/2024 | 1400/1400 | GB | Monthly Decision Maker Panel Data | |
07/11/2024 | 1430/1530 | EU | ECB's Lane in panel on Lesson Learnt in Past Crises | |
07/11/2024 | 1500/1000 | ** | US | Wholesale Trade |
07/11/2024 | 1530/1030 | ** | US | Natural Gas Stocks |
07/11/2024 | 1900/1400 | *** | US | FOMC Statement |
07/11/2024 | 2000/1500 | * | US | Consumer Credit |
08/11/2024 | 2330/0830 | ** | JP | Household spending |
08/11/2024 | 0230/0230 | GB | BOE's Breeden at Singapore Fintech Festival | |
08/11/2024 | 0700/0800 | ** | SE | Private Sector Production m/m |
08/11/2024 | 0745/0845 | * | FR | Foreign Trade |
08/11/2024 | 0900/1000 | * | IT | Industrial Production |
08/11/2024 | 0900/1000 | EU | ECB's Cipollone moderating event on Italy and the World Bank Group | |
08/11/2024 | 1000/1100 | * | IT | Retail Sales |
08/11/2024 | 1110/0610 | CA | BOC Deputy Gravelle speaks on panel at ECB conference. | |
08/11/2024 | 1215/1215 | GB | BOE's Pill and Shortfall hold MPC Agency briefing | |
08/11/2024 | 1330/0830 | *** | CA | Labour Force Survey |
08/11/2024 | 1500/1000 | ** | US | U. Mich. Survey of Consumers |
08/11/2024 | 1700/1200 | *** | US | USDA Crop Estimates - WASDE |