The upcoming week is set to be pivotal for global financial markets as several major central banks prepare to announce monetary policy decisions. The Federal Reserve, European Central Bank, Bank of Japan, and Bank of England will all deliver updates on interest rates and their outlooks for economic risks.
Market participants widely anticipate a 25 basis point rate cut from the Federal Open Market Committee on Wednesday. This expectation has gained strength following the release of September’s Consumer Price Index, which came in cooler than forecast. Some analysts now believe there is growing momentum for a third rate reduction by the Fed in December.
Meanwhile, former U.S. President Donald Trump is expected to remain in the headlines during his Asia tour, following a government shutdown back home. A much-anticipated meeting with Chinese President Xi Jinping in South Korea on Thursday could potentially ease tensions between the world’s two largest economies, according to recent reports.
U.S. Treasury Secretary Scott Bessent announced that discussions held on the sidelines of the Asia-Pacific Economic Cooperation (ASEAN) Summit in Kuala Lumpur have averted the previously threatened 100% tariffs on Chinese imports, which were scheduled to take effect November 1. Additionally, Bessent indicated that China may postpone implementing its new licensing rules for rare earth minerals and magnets by one year as the policy undergoes review.
Before the summit, Trump will meet with Japan’s newly appointed Prime Minister Sanae Takaichi in Tokyo on Tuesday. While significant policy shifts are unlikely, Takaichi—the country’s first female leader—has voiced intentions to revisit aspects of the U.S.-Japan trade agreement, particularly a proposed $500 billion “signing bonus” demanded by Trump.
Trump is also scheduled to hold talks with Canadian Prime Minister Mark Carney in Seoul. This comes after the former U.S. president raised tariffs on Canadian goods by 10% over the weekend, citing retaliation for a political advertisement by Ontario’s premier that featured archival footage of Ronald Reagan criticizing tariffs as harmful to Americans.
With uncertainty surrounding the release of official U.S. economic data, investors will closely examine corporate earnings from major firms including Alphabet, Amazon, Apple, Chevron, Eli Lilly, ExxonMobil, Mastercard, Meta, Microsoft, NextEra, UnitedHealth, and Visa for insights into economic health.
Key economic indicators to monitor include:
(1) Consumer Confidence: The Conference Board’s October survey, due Tuesday, is expected to show stability near the 94 mark. Analysts will pay close attention to labor market perceptions within the report.
(2) Regional Manufacturing Activity: October surveys from the Dallas Fed (Monday) and Richmond Fed (Tuesday) may provide additional context on economic momentum. Though the average of recent regional reports shows softening, it still suggests the ISM Manufacturing PMI could remain above the 50 threshold, indicating expansion.
(3) Housing Market Trends: Data on pending home sales for September, to be released Wednesday by the National Association of Realtors, is likely to reflect continued weakness in residential transactions.
— news from Yardeni QuickTakes
— News Original —
Economic Week Ahead: October 27-31
The week ahead will see central banks commanding the spotlight as the Federal Reserve, European Central Bank, Bank of Japan, and Bank of England weigh in on both interest rates and the balance of economic risks. n nAll eyes will be on the Federal Open Market Committee, which is widely expected to deliver another 25bps rate cut on Wednesday. Given cooler-than-expected September CPI data, odds are rising that the Fed will cut rates for a third time this year in December as well. n nPresident Donald Trump, never one to cede center stage, will garner loads of attention as he leaves behind a shutdown US government and makes the rounds in Asia. The US President ‘s long-awaited summit with Chinese leader Xi Jinping in South Korea on Thursday could mend fences between the two biggest economies, according to news reports this evening. n nUS Treasury Secretary Scott Bessent said talks on the sidelines of the Asia-Pacific Economic Cooperation (ASEAN) Summit in Kuala Lumpur had eliminated the threat of Trump ‘s 100% tariffs on Chinese imports, set to start on November 1. Bessent also said he expects China to delay the implementation of its licensing regime for rare earth minerals and magnets by a year while the policy is reconsidered. n nBefore then, Trump will be in Tokyo on Tuesday, where he and the new Japanese prime minister, Sanae Takaichi, will take the measure of each other. Though few expect fireworks, Japan ‘s first female leader has talked of a “renegotiation” of the US-Japan tariff deal, particularly the $500 billion “signing bonus” Trump is demanding. n nTrump will also meet Canadian Prime Minister Mark Carney in Seoul, where the ASEAN summit is taking place. Over the weekend, Trump raised tariffs on Canada by 10% in retaliation for a political ad by the Ontario province ‘s premier that used 1987 archival footage of Ronald Reagan warning that tariffs “hurt every American.” n nAmid uncertainty about when the US government will release economic data, markets are sure to look for economic clues in earnings results from Alphabet, Amazon, Apple, Chevron, Eli Lilly, ExxonMobil, Mastercard, Meta, Microsoft, NextEra, UnitedHealth, and Visa. n nHere ‘s a list of economic reports most likely to offer some visibility into how the economy is faring: n n(1) Consumer confidence. The Conference Board ‘s Consumer Confidence Index survey (Tue) likely remained steady in October around the 94 level. We ‘ll be watching for signs of stabilization in the jobs availability data (chart). n n(2) Regional Fed business surveys. October business surveys from the Dallas Fed (Mon) and the Richmond Fed (Tue) could fill in some blanks about how the economy is faring. The average of the three available surveys weakened this month but suggests that the ISM M-PMI might still rise above 50 (chart). n n(3) Housing activity. September ‘s pending home sales (Wed) from the National Association of Realtors probably remained relatively weak (chart).