What to watch: 2/2: CBs this week

It's a big week for central banks with the RBA, Fed, Norges Bank and BOE all due to meet this week.

• While inflation showed no signs of slowing in Q3, recent RBA commentary gives many reasons why it is likely to stick to 25bp in November rather than return to a 50bp move. As a result, the MNI Markets team expect rates to rise to 2.85% at the meeting overnight tonight from 2.60%. There is a risk though that the RBA hikes 50bp on November 1, on the back of CPI inflation rising to its highest since mid-1990 in Q3 and a clear pick-up in domestically-driven price pressures. For the full MNI RBA Preview click here.
  
• The November FOMC meeting is mainly about the message the Fed wants to send about its plans for December. A 4th consecutive 75bp hike is assured this time. A step-down to a 50bp hike at the following meeting looks like the path of least resistance for now – the question is, how strongly does the FOMC seek to express that view. In a close call, we expect only limited changes to the Statement – but anticipate that Chair Powell will signal that the Committee is currently eyeing either 50bp or 75bp in December, with the decision to be data-dependent. For the full MNI Fed Preview click here.
• For the Norges Bank decision on Thursday, analysts are divided between a 50bp or 75bp hike.
• For the Bank of England meeting, also on Thursday, markets are analysts are both largely looking for a 75bp hike but there are downside risks of a smaller 50bp hike.