In the European session, the main event will be the ECB rate decision where the central bank is expected to cut by 25 bps. In the American session, we will get lots of US data including Industrial Production, NAHB Housing Index and the Philly Fed Manufacturing Index. The focus though will be on the US Retail Sales and Jobless Claims figures.
12:15 GMT/08:15 ET - ECB Rate Decision
The ECB is expected to cut interest rates by 25 bps and bring the policy rate to 3.25%. The central bank wasn’t looking for a back-to-back cut in October but following the bleak PMIs at the end of September, the market rushed to price in such a move which was then solidified following the benign Eurozone CPI and dovish comments from ECB members. The market expects the ECB to deliver another 25 bps cut in December and four more in 2025.
12:30 GMT/08:30 ET - US Jobless Claims
The US Jobless Claims continues to be one of the most important releases to follow every week as it’s a timelier indicator on the state of the labour market.
Initial Claims remain inside the 200K-260K range created since 2022, while Continuing Claims after rising sustainably during the summer improved considerably lately.
Last week though, the data surprised to the upside with both Initial and Continuing Claims spiking to the cycle highs. The spike was attributed to distortions from Hurricane Helene and the Boeing strike.
This week Initial Claims are expected at 255K vs. 258K prior, while Continuing Claims are seen at 1870K vs. 1861K prior.
12:30 GMT/08:30 ET - US September Retail Sales
The US Retail Sales M/M are expected at 0.3% vs. 0.1% prior, while the ex-Autos M/M measure is seen at 0.2% vs. 0.1% prior. The focus will be on the Control Group figure which is expected at 0.3% vs. 0.3% prior.
Consumer spending has been stable which is something you would expect given the positive real wage growth and resilient labour market. Retail sales data is generally a market moving release but it's volatile and most of the time the initial moves are faded.
The Y/Y figure smooths the noise but in recent recessions, retail sales haven't been a leading indicator, on the contrary, retail sales showed weakness when the recessions were well underway. Therefore, the data shouldn’t influence the market’s pricing much.
Central bank speakers:
- 15:00 GMT/11:00 ET - Fed's Goolsbee (dove - non voter)
