Inflation data from the UK and Canada, preliminary Q3 GDP from Japan and Switzerland as well as preliminary November PMI from the Eurozone and UK will highlight the week ahead of us. We will get a deluge of US data now that government has reopened, including September NFP, so markets will be volatile this week. Additionally, Nvidia reports earnings on Wednesday.
USD
Over the weekend President Trump floated the idea of giving Americans a check for $2000 thanks to all the tariff revenue they collected since April. Treasury Secretary Bessent has watered down president’s words stating that this “remittance” could be given via tax cuts rather than direct cash. Giving direct cash would cause inflation to rise so the move with tax cuts is more desirable. ADP weekly employment report showed that economy lost an average of 11,250 jobs a week in the four weeks ending October 25. This report used different methodology than monthly ADP report which stated that economy added 42k jobs in October with trade, transportation, and utilities adding 47k and education and health services added 26k jobs. Biggest loses were seen in information 17k and professional and business services 15k.
House of Representatives voted 222-209 in favor of government reopening and president Trump signed the bill to end the longest government shutdown that lasted 43 days. President stated that the damage from the shutdown is estimated to be at around $1.5tn but that calculation of the exact amount will take weeks if not months. September jobs report is expected to be published soon and we will start getting stream of normal economic data in the near future. White House had hinted that October jobs and inflation reports may not be published at all.
The yield on a 10y Treasury started the week at 4.10%, rose to 4.15% and finished the week at around 4.14%. The yield on 2y Treasury started the week at 3.58%, rose to 3.63% and finished the week at around 3.62%. Spread between 2y and 10y Treasuries started the week at 54bp and finished the week at 52bp. FedWatchTool sees the probability of a 25bp rate cut at December meeting at 50%.
This week we will have minutes from the latest Fed meeting. Now that government has reopened we will also get some economic data from September but its validity should be questioned because data would not be compiled with regular due diligence.
Important news for USD:
Tuesday:
ADP Employment Index 4-week average
Wednesday:
FOMC Minutes
EUR
Final October German and Spanish CPI were unchanged at 2.3% y/y and 3.1% y/y with former ticking down form 2.4% y/y in September. French reading was revised down to 0.9% y/y from 1% y/y as preliminary reported and 1.2% y/y the previous month. Second estimate of Q3 GDP was unchanged at 0.2% q/q while yearly figure was revised up to 1.4% from 1.3% as preliminary reported.
This week we will have preliminary November PMI data expected to stay in expansion.
Important news for EUR:
Friday:
Manufacturing PMI (Eurozone, Germany, France)
Services PMI (Eurozone, Germany, France)
Composite PMI (Eurozone, Germany, France)
GBP
October employment report was full of weakness. Payrolls change showed economy losing 32k jobs with September reading being revised down to also show a loss of 32k jobs. September ILO unemployment rate jumped to 5% from 4.8% in August while markets were expecting a 4.9% print. Wages declined with average weekly earnings printing 4.8% 3m/y vs 5% 3m/y as expected and as previous month while ex bonus component showed an expected tick down to 4.6% 3m/y from 4.7% 3m/y the previous month. Given that November BoE meeting saw 5-4 vote this weak report could push the scales towards a December cut. BoE Greene was satisfied with wage data as it indicates that disinflationary progress is on the track. On the subject of rising unemployment she stated that it is not great but that due to issues with labor force survey it is hard to say how precise data is.
Preliminary reading of Q3 GDP showed economy expand by 0.1% q/q vs 0.2% q/q as expected dragged down by September GDP which came in at -0.1% m/m vs flat as expected and negative revision to August reading which showed no growth instead of 0.1% m/m growth as previously reported. Household consumption rose 0.2% q/q vs 0.1% q/q in Q2 but business investment fell by 0.3% q/q and overall gross capital formation declined by 1.8% q/q. Government consumption and net trade contributed positively to the reading though latter showed unhealthy drop in both exports and imports. Services rose in September by 0.2% m/m but industrial and manufacturing production plunged, former fell 2% m/m, and dragged monthly GDP with them into negative territory.
Financial Times reported that PM Starmer and Chancellor of Exchequer Reeves will not raise income tax. This in turn means that fiscal hole in the budget, of around £30bn, will have to be filled with alternative means, most likely with more debt, which led to Gilts being sold and yields spiking. Budget will be announced on November 26.
This week we will have October inflation data expected to decline further as well as preliminary November PMI data expected to show expansion across sectors.
Important news for GBP:
Wednesday:
CPI
Friday:
Manufacturing PMI
Services PMI
Composite PMI
AUD
Employment report for the month of October was a stellar one. Employment change came in at 42.2k, more than double expected 20k. The unemployment rate came down to 4.3% from 4.5% while markets were bracing for a 4.4% print and it was done with no change to participation rate which stayed at 67%. Composition of jobs added shine to the report with all of the jobs added (55.3k) being full-time jobs while part-time employment dropped by 13.1k. The report shattered chances of a December cut and gave AUD a nice boost.
October CPI data from China saw headline number at 0.2% y/y while expectations were for it to remain flat after falling 0.3% y/y in September. PPI has continued to decline, but the pace slows down as it printed -2.1% y/y vs -2.3% y/y the previous month. Industrial production dropped to 4.9% y/y from 6.5% y/y in September while markets were expecting 5.5% y/y print. Semiconductors, auto manufacturing as well as rail, ships and aeroplane manufacturing remain key growth industries. Retail sales ticked down to 2.9% y/y from 3% y/y the previous month but managed to beat expectations of a 2.7% y/y print. Gold and jewellery sales saw biggest increases in sales while household appliances sales plunged. Economy is set on path to reach GDP target for 2025 but industrial production and retail sales have been declining it second half of the year and could use fresh stimulus to start 2026 on a strong note.
NZD
RBNZ published report on inflation expectations and it shows 2.39% for 1-year, up from 2.37% previously while 2-year was unchanged at 2.28%. The bank focuses on 2-year measure as it better shows the transmission of monetary policy, October electronic card retail sales rose 0.2% m/m and 0.8% y/y indicating stabilization in consumers’ demand.
CAD
Building permits rose 4.5% m/m in September after falling for three straight months. Manufacturing sales rose in September by 3.3% m/m after dropping 1.1% m/m in August while wholesale trade improved 0.6% m/m after a 1% m/m drop the previous month. CAD has had a rough week, following USD and losing ground against the majors.
This week we will have October inflation data expected to show no changes.
Important news for CAD:
Monday:
CPI
JPY
Prime Minster Takaichi announced that government will abandon primary surplus target in order to take a multi-year framework to measure fiscal progress. They will conduct looser fiscal policy, providing stimulus to the economy in order to help with rising costs of living and spur economic growth. This will have negative impact on JPY as more stimulus increases supply of JPY in the interbanking system and thus devalue the currency. She added that there are no plans for introducing sales tax in the near future, but it is still open to bring it in later in the future. Additionally she stated that they cannot be certain that Japan has escaped deflation and that appropriate monetary policy to that condition is very important. Thus she campaigned for BoJ not to raise interest rates as she plans to put more stimulus into the economy and put more downward pressure onto JPY. Yields on a 10y JGB are crossing 1.69% and are moving towards levels not since since 2008.
This week we will get preliminary Q3 GDP data.
Important news for JPY:
Monday:
GDP
CHF
SNB total sight deposits for the week ending November 7 came in at CHF460bn vs CHF470.5bn the previous week. This is a sizeable drop in sight deposits but it still keeps them within well-established range for the year. Switzerland agreed to tariff relief with the US which led to Swissy making all-time high against JPY and GBP with EURCHF making a new daily closing low and an all-time low if we exclude the flash crash on SNB day in 2015.
This week we will get preliminary Q3 GDP data.
Important news for CHF:
Monday:
GDP
