During the coming week, investors will be looking at the highly anticipated Federal Reserve policy meeting on Wednesday for new hints about the time of the next rate hike for the U.S.
There will also be the focus on the global financial markets on the monthly U.S. employment report which is due on Friday that will gauge if the largest economy in the world is strong enough to endure a monetary policy tightening before the year-end.
Investors, in the meantime, are waiting for an announcement on Wednesday about the monetary policy from the Bank of Japan. Most of the investors expect that there will be a hold off by the bank on the expansion of stimulus after it has just had a policy framework revamping.
The rate announcement on Thursday from the Bank of England is going to be the focus, after its governor, Mark Carney, placed doubt last week on the expectation of more monetary stimulus.
Also, the market players in China will be hoping to receive data about the country’s manufacturing sector, even though there have been ongoing concerns about the stability of the second biggest economy in the world.
Below are the five events which are more than likely to affect the markets.
1. Decision about the Fed rate
There is no action expected to be taken by the Federal Reserve on the interest rates at the end of its two-day policy meeting on Wednesday at 2:00 PM ET (18:00 GMT).
The most recent statement will be released by the central bank while the investors are hoping for any change which could clearly signal a rate increase in December.
With the November 8 presidential election, an earlier rate increase is unlikely. The current pricing for the markets is that there is a less than 10% chance for an increase in the rates for next week. On the other hand, there is a 75% chance for an increase in the rates in December.
2. October’s report for U.S. jobs
On Friday at 8:30AM ET (12:30 GMT), the October nonfarm payrolls report will be released by the U.S Labor Department.
There is the consensus prediction that there will be a growth of 175,000 jobs seen in the data. This increase comes following the September increase of 156,000. The rate of unemployment is predicted to drop from 5.0% to 4.9%. There is a rise of 0.3% expected for the average hourly earning after it gaining 0.2% last month.
A positive employment report points to an improvement in the economy, and it supports the case for higher interest rates in the next few months. However, a weak report could add to the uncertainty felt with regards to the economic outlook, and it may push the prospects of a tighter monetary policy further away from reach.
The employment report is not the only issue to be highlighted. The U.S. the growth in the manufacturing and service sector, factory orders, auto sales, the personal spending of consumers and inflation, in addition to the monthly trade figures will also take to the stage this week.
3. Bank of Japan’s policy announcement
The most recent decision of the Bank of Japan about rates is set for Tuesday during Asian hours. They will also be publishing a monetary policy statement. This statement will assess the progress of its new framework for yield control.
Haruhiko Kuroda, the governor of Central Bank, is set to hold a press conference to speak about the decision following the announcement.
On Friday, a poll by Reuters showed that the central bank of Japan is expected to hold the negative interest rate at -0.1%, at the same time as maintaining the ten-year target of the government bond yield at approximately 0.0% after a restoration last month in its policy focus.
The Bank of Japan, according to the poll, is expected by the analysts to maintain the net amount that it buys of Japanese government bonds each year at approximately 80 trillion yen ({currency}760.96 billion).
4. Rate decision of the Bank of England
On Thursday, the rate decision and minutes of the meeting of the Bank of England’s Monetary Policy Committee will be released at 11:00 GMT (7:00 AM ET).
Market analysts predict that the Bank of England will stand firm on policy following the remarks of Governor Mark Carney, with the flow of strong data in the last week, slowed down fears of a recession in the coming term.
A poll by Reuters showed that majority of economists this year have pushed away a rate cut. Some of the investors and traders in the financial markets are already anticipating the next move up.
On Tuesday, the readings for the manufacturing sector’s activity in October will be released by the U.K. The release will be followed by a report on Wednesday about the construction sector and on Thursday about the service sector.
5. October’s data for Chinese manufacturing
On Tuesday at 01:00 GMT on Tuesday (9:00 PM ET Monday), the China Federation of Logistics and Purchasing is due to release the October data on the activity of the manufacturing sector. This release will be followed at 01:45 GMT(9:45 PM ET) with the Caixin manufacturing index.
China’s official manufacturing purchasing managers’ index is predicted to stay unchanged at 50.4. There is the expectation that the Caixin survey will increase slightly up from 50.1 to 50.2 in the coming month.
Reading above 50.0 are a sign of expansion, while readings which are less than 50.0 show an industry contraction.
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