By Dow Jones Newswires staff
Below are the most important global events likely to affect FX and bond markets in the week starting Nov. 10.
The U.S. government shutdown has continued and is now the longest in history, leaving investors eyeing any developments that could lead to a breakthrough to end the political deadlock. If the shutdown continues, then official U.S. economic data will continue to be delayed.
Beyond the U.S., focus will center on China's October data, including industrial output, retail sales and investment. Gross domestic product data are also due from the eurozone and the U.K.
U.S.
The coming week will be quiet if the government shutdown continues. This would mean official data will still be delayed, including key inflation data for October, and there is little in the way of private data due.
The lack of recent official data, particularly figures on the labor market, make it difficult for investors and for the Federal Reserve to make an accurate assessment of the state of the U.S. economy and about how far and how quickly U.S. interest rates will need to fall.
At the time of its last decision, the Fed cut interest rates by 25 basis points but said a follow-up reduction was not a foregone conclusion.
Signals from recent non-official data have been mixed. The ISM services survey and ADP private payrolls figures for October were better than expected. Data from outplacement firm Challenger, Gray & Christmas, however, showed companies cut more than 150,000 jobs in October, the biggest reduction for the month since 2003.
Official data due during the week--which will be delayed unless there is a breakthrough in talks between Republicans and Democrats--include inflation data for October and jobless claims on Thursday, followed by October retail sales and producer prices on Friday.
"All eyes will be on Washington and the question of whether there will be any movement in the deadlocked budget dispute now that regional elections are over," analysts at LBBW said in a note.
The Treasury will auction $58 billion in three-year notes on Monday, $42 billion in 10-year notes on Wednesday and $25 billion in 30-year bonds on Thursday, marking a test of investor appetite for long-dated bonds.
Tuesday is the U.S. Veterans Day holiday. Treasury markets will be closed but stock markets will open as usual.
Eurozone
Germany's ZEW economic sentiment indicator for November on Tuesday will be one of the key releases during the week, possibly confirming cautiously optimistic sentiment in Europe's largest economy.
The second estimate of eurozone gross domestic product for the third quarter and flash estimate employment data on Friday are also awaited. Other releases include final CPI data for Germany and Italian industrial production for September on Wednesday, then final October CPI data for France and Spain on Friday.
Bond supply will include the Netherlands reopening the July 2035 DSL on Tuesday. Germany will offer 2046- and 2056-dated Bunds on Wednesday, while Italy's bond auction is scheduled for Thursday.
U.K.
Focus in the U.K. will continue to center on any clues on possible measures in the upcoming Nov. 26 budget and their implications for U.K. government bonds and sterling.
Investors will also pay close attention to jobs data on Tuesday and third-quarter gross domestic product figures on Thursday amid uncertainty about whether the Bank of England will cut interest rates as early as next month, or whether it will wait until February.
The BOE left interest rates on hold at 4.0% at its latest meeting, but the vote was tight, with four out of nine policymakers preferring to cut the main rate by 25 basis points. The central bank acknowledged that inflation had declined considerably and had likely now peaked, although it remains too high. If inflation continues to edge lower, the BOE should be able to gradually cut rates further, Gov. Andrew Bailey said in a statement.
Analysts interpreted this to mean that rates could fall in December as long as data continue to show a weakening in inflationary pressures and a slowing economy.
If Tuesday's jobs data show easing wage pressures while unemployment ticks up, this could add to prospects of a rate reduction before year-end.
"The labor market is expected to weaken further, with a rise in unemployment and slower pay growth," HSBC economists said in a note.
U.K. money markets currently price in a 58% chance of a rate cut on Dec. 18, LSEG data show.
Trade and industrial output data for September are also released on Thursday. The BRC's retail sales monitor for October is due Tuesday and the RICS October house-price survey on Thursday.
Scandinavia
Norwegian inflation data for October are due Monday, while Sweden releases detailed inflation data for October on Thursday.
Norway will hold an auction Wednesday.
Switzerland
A bond auction is scheduled for Wednesday.
Japan
With the timing of the Bank of Japan's next interest-rate hike in focus, investors will look for clues in the central bank's summary of opinions from its latest October meeting and in a speech by policy board member Junko Nakagawa, both scheduled for Monday.
Japanese local media have reported that the central bank "is now seriously considering an additional rate hike, and there is a possibility that a policy change could be implemented as early as the December meeting," Barclays analysts said.
"Against this backdrop, the focus will be on any discussions among the policy makers regarding the timing of a rate hike," the analysts said.
Japan's current-account balance for September and bank-lending data for October are slated for release on Tuesday.
On Wednesday, the Bank of Japan is scheduled to conduct outright purchases of Japanese government bonds across three sectors of the yield curve--securities with tenors of more than one year and up to three years, more than five years and up to 10 years, and more than 10 years and up to 25 years. The planned operations are expected to lend support to the domestic bond market.
The Ministry of Finance will auction about 700 billion yen of 30-year JGBs on Tuesday and about 2.4 trillion yen of five-year sovereign notes on Thursday. The 30-year bonds to be issued in November will reopen the October 2025 issue, the ministry said. Among the two auctions, the 30-year sale could attract stronger investor demand thanks to the higher yield likely to be offered.
China
A busy data week awaits in China, with a slew of indicators offering a snapshot of the economy's strength at the start of the year's final quarter. Industrial output, retail sales and fixed asset investment figures due on Friday will gauge momentum across key sectors, with markets looking for signs of a pickup in consumption and investment.
Economists in a Wall Street Journal poll expect October industrial production to have grown 5.5% on year, down from 6.5% in September. Last month's on-year retail sales growth is expected to ease slightly to 2.8%, while non-rural fixed-asset investment growth will likely slow further to 0.8% in the year to date.
Citi economists attributed the moderation partly to fewer working days and softer exports, while DBS economists say industrial activity remains constrained by weak domestic demand and persistent overcapacity, with firms scaling back operations amid Beijing's crackdown on excessive competition.
Despite continuing trade-in subsidies for durable goods such as home appliances and electronics, household sentiment remains fragile due to poor job prospects, slowing income growth and high precautionary savings, DBS economists added. Echoing those projections, HSBC economists also expect the October data to show slowing momentum, with Fixed Asset Investment likely deteriorating as the property-sector malaise drags on.
Markets will also watch housing-price data for signs of stabilization in the real-estate slump--a development economists say is key to reviving weak consumer and business confidence.
China's money-supply data is also due this week. ANZ economists expect M2 growth to ease to 7.8%, though they don't anticipate an immediate policy response given external pressures.
Australia
Australian bond traders are still adjusting to the new reality that the Reserve Bank of Australia may have already delivered its final interest rate cut of the current cycle.
The recent release of third-quarter inflation data has substantially reshaped the outlook for interest rates--a view reinforced by recent comments by RBA Governor Michele Bullock.
Deputy Governor Andrew Hauser will speak Monday, offering the RBA another opportunity to guide expectations.
With inflation expected to stay elevated well into next year, the central bank will likely remain sidelined. Only a sharp rise in unemployment might prompt a change in direction, but it would likely need to be significant for the RBA to shift its focus away from inflation risks.
Indeed, the next move in the official cash rate could even be upward.
Malaysia
Malaysia's revised third-quarter gross domestic product data on Friday will likely confirm that the economy expanded, supported by domestic demand. Barclays economists expect the reading to match the advance estimates of 5.2% on-year growth.
If the data come in line with or above estimates, it would reinforce the improving outlook for Malaysia's economy. The Southeast Asian nation has consistently outperformed expectations, prompting a string of full-year forecast upgrades despite lingering tariff risks.
Hong Kong
Hong Kong is set to release its third-quarter GDP data Friday. Advanced figures showed the city's economy grew 3.8% in real terms from a year earlier, reinforcing signs of recovery.
The government said last month it expects steady growth for the rest of 2025.
A continued, though moderate, global expansion and prospective U.S. interest-rate cuts should support asset-market sentiment, according to the city's statistics department.
India
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