NEWSLETTER
Thursday / September 29Sep 29
Tuesday / November 2
Fed's tapering moment
The US Federal Open Market Committee (FOMC) is expected to announce a decision to start reducing bond purchases up to $120 billion per month at its policy meeting on November 2 and 3.
Fed Chairman Powell suggested last month that the bank should soon begin tapering its asset purchases. On the other hand, he stated that it is too early to raise interest rates.
Due to the recent upward trend in prices, expectations for an interest rate hike have strengthened for the middle of next year, when the reduction in asset purchases will come to an end. Investors will focus on the FOMC statement and Powell's post-decision press conference.
BoE rate decision
The Bank of England (BoE) is holding its policy meeting on Thursday. Comments from BoE Chairman Bailey and some other executives created earlier-than-anticipated rate hike expectations in financial markets. Analysts polled by Reuters forecast the bank will raise rates 15 basis points to 0.25% from the record low of 0.1%.
Sterling slid to a two-week low against the dollar on Monday amid uncertainty over the BoE's policy stance, seen as a test of credibility, and pressured by mounting post-Brexit tensions with France over fisheries.
US workforce data
US nonfarm payrolls data is released on Friday. The median expectation of economists polled by WSJ is a 450,000-employment figure in October. Unemployment rate is expected to decrease from 4.8% to 4.7%.
The previous month's 194K figure showed that the economic recovery for the Biden administration takes longer than anticipated as the labor market woes deepened.
US jobless claims, due Thursday, are expected to come out at 282,000, slightly up from 281,000 the previous week. Demands have fallen over the past few weeks as the labor market has tightened.
The US trade deficit, announced Wednesday, is expected to increase from $73.3 billion in August to $80.3 billion in September. Strong consumer demand drives up imports.
RBA meeting
In Australia, economists think Central Bank (RBA) chief Philip Lowe will change market guidance on the interest rate after his monthly board meeting this week following the unexpected rise in inflation.
The annual rate of core inflation associated with interest rate decisions taken by the RBA unexpectedly rose to 2.1 percent from last week's figures. This is the strongest momentum in six years, and it's in the RBA's target band.
Australian markets expect the RBA to develop guidance for a rate hike as early as 2023 or even mid-2022.
The Canberra Times reported that the central bank is expected to cut its bond-buying regime from $4 billion to $2 billion from February next year.
