Fed, BoE, GDP, PMI & CPI: What to Expect in this Week Ahead

As October nears its end and November approaches, traders, analysts, and consumers may want to keep track of this month’s and the upcoming month’s economic releases to get a better sense of where the global economy may be headed. 

From Central Banks’ meetings to economic data releases like Non-Farm Payrolls (NFPs), Consumer Prices Index (CPI), and Gross Domestic Product (GDP), here are this week’s main market events:

Central Banks’ Meetings: Fed & BoE in Focus 

The Federal Reserve (Fed) is poised to hold its penultimate FOMC meeting of 2023 on October 31-November 1.

It's widely acknowledged that the Federal Reserve's meetings stand out as some of the most eagerly awaited events each year. 

The outcomes of these gatherings, especially their monetary policy decisions, possess the potential to send ripples across the markets and can extend beyond the US. 

As such, traders may be keenly watching to discern whether the Fed will adopt a hawkish or dovish stance this time around. 

While the Fed has famously been hawkish in the past couple of months as it attempted to tame inflation, many investors and market watchers are predicting that the Central Bank will be more dovish in its meeting on Wednesday. 

It appears that Fed Chair Jerome Powell’s speech whereby he said that “rising long-term yields reduce the need for further rate increases,” is what drove many investors to think that the Fed may stop its monetary tightening. 

Nonetheless, despite this overarching argument, it is important to keep in mind that some still believe that the Fed will likely revert to its hawkishness in its final meeting of the year on December 12-13, 2023. 

Beyond the Fed, this week, the Bank of England (BoE), which is England’s Central Bank is expected to meet on Thursday, November 2 one time before its last meeting of the year on December 14, 2023. 

Much like the Fed, many expect the BoE to keep its interest rates unchanged at 5.25% which would be a 15-year record high while also keeping the door open for further rate hikes in the future. 

Whether these predictions will indeed materialize is yet to be determined. Traders, consumers, and analysts will need to keep an eye on this week’s monetary policy decisions to see what will come out and how this might affect the global economy. 

NFPs: US Job Market Update

On Friday, November 3, the US Non-Farm Payrolls (NFPs) will be released. The NFPs provide valuable information about the state of the US employment market by measuring the number of employees in various industries, hence indicating whether or not the labor market is booming. (Source:Investopedia)

This week’s NFPs will show how the US labor market fared in October following an exponential growth in September whereby 336,000 jobs were added. 

However, despite September’s growth, many analysts expect October’s employment rates to be more “moderate” at about 182,000 additional jobs, while unemployment is expected to come in at 3.8%, and wages are expected to sustain their post-pandemic lows of 4% YoY. 

If these predictions come to fruition, then it could strengthen the need for the Fed to adopt a more dovish tone. 

Eurozone (Euro Area) Inflation and GDP Releases

After last week’s European Central Bank (ECB) meeting whereby the bank kept its rates unchanged, many may have their attention toward Tuesday’s inflation and GDP releases to see how the ECB’s decisions have affected the Eurozone’s economy. 

While the results of Thursday’s releases are still unclear, preliminary CPI data is predicted to reflect that inflation may be coming closer to the ECB’s 2% target rate. As such, the projections point toward a slowing of 3.2% in headline inflation. 

As for the GDP data, the expectations suggest that the Eurozone’s economy may have decreased by 0.1% in Q3. Only time will tell what the results will look like.

Conclusion

As October and this year draw closer to an end, it may be helpful to keep track of this week’s upcoming economic releases ranging from Central Banks’ decisions to GDP and CPI data from global economies to see how the financial markets are moving and what possible outcomes traders and consumers should expect in the year to come.