Today is going to be the busiest day of the week in terms of data releases. In the European session, the main highlight will be the Eurozone CPI report. In the American session, we get the Canadian GDP, the US Core PCE, the US Jobless Claims and the US Employment Cost Index.
We might get some short-term reactions, but overall the market is now waiting for the US election, so the choppy price action we've seen recently will likely persist until then.
10:00 GMT/06:00 ET - Eurozone October Flash CPI
The Eurozone Flash CPI Y/Y is expected at 1.9% vs. 1.7% prior, while the Core CPI Y/Y is seen at 2.6% vs. 2.7% prior. The market’s pricing is already very dovish for the ECB, so we will likely need a very soft report to see the market price in some more easing.
A hot report though will likely take off the table the 12% probability of a 50 bps cut in December. We will also see the Eurozone Unemployment Rate which is expected to remain unchanged at 6.4%.
12:30 GMT/08:30 ET - US September PCE
The US PCE Y/Y is expected at 2.1% vs. 2.2% prior, while the M/M measure is seen at 0.2% vs. 0.1% prior. The Core PCE Y/Y is expected at 2.6% vs. 2.7% prior, while the M/M figure is seen at 0.3% vs. 0.1% prior.
Forecasters can reliably estimate the PCE once the CPI and PPI are out, so the market already knows what to expect. Besides, this report won’t change anything for the Fed as they are going to cut by 25 bps at the November meeting no matter what.
The market’s focus is now on the US election.
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 an improvement in the last two months, spiked to the cycle highs in the last couple of weeks due to distortions coming from hurricanes and strikes.
This week Initial Claims are expected at 233K vs. 227K prior, while Continuing Claims are seen at 1880K vs. 1897K prior.
12:30 GMT/08:30 ET - US Q3 Employment Cost Index
The US Q3 Employment Cost Index (ECI) is expected at 0.9% vs. 0.9% prior. This is the most comprehensive measure of labour costs, but unfortunately, it’s not as timely as the Average Hourly Earnings data. The Fed though watches this indicator closely.
Although wage growth remains high by historical standards, it’s been easing for the past two years, and it’s expected to continue to do so given the fall in the job quit rate.
Central bank speakers:
- 09:00 GMT - ECB's Panetta (dove - voter)
- 10:00 GMT/06:00 - ECB's Escriva (dove - voter)
- 11:30 GMT/07:30 ET - ECB's Knot (hawk - voter)
