The week starts slowly on Monday with no significant economic events scheduled for the FX market.
On Tuesday, the focus will be on Australia, where the RBA will announce its monetary policy decision. In the U.S., attention will turn to the JOLTS job openings and the CB consumer confidence report.
Wednesday brings eurozone inflation data, along with the release of manufacturing PMI figures for the eurozone, the U.K., and the U.S. In addition, the U.S. will publish the ADP non-farm employment change.
On Thursday, Switzerland will release its inflation data, while in the U.S. the weekly unemployment claims will be in focus.
Friday’s highlights include a speech from BoJ Governor Ueda at a meeting with business leaders in Osaka. In the U.S., the spotlight will be on the average hourly earnings m/m, non-farm employment change, unemployment rate, and ISM services PMI.
Throughout the week, several FOMC members are scheduled to deliver remarks. Australia will also shift to daylight saving time.
At this week’s meeting, the RBA is expected to keep its cash rate unchanged. Since the last meeting, inflation data has come in hotter than expected, but policymakers will need more evidence to determine whether this is temporary. In addition, as Westpac analysts point out, the latest figures only provide a partial view of inflation trends beyond Q3.
On the labor market side, there are some signs of gradual softening with employment growth and job vacancies slowing experiencing a slowdown.
Eurozone inflation data will be closely watched, with headline CPI expected to edge up to 2.3% y/y while core inflation is projected to remain unchanged.
At its most recent meeting, the ECB kept rates steady and delivered slightly dovish projections, revising inflation forecasts for 2026 and 2027 below the 2.0% target. This keeps the door open for another rate cut.
A December cut remains possible if core and services inflation continue to ease, Wells Fargo analysts said. On the other hand, persistent price stickiness would strengthen the case for rates staying on hold for longer. September’s PMI results for the Eurozone highlighted the uneven nature of the recovery. The manufacturing index dropped back into contraction at 49.5, erasing August’s temporary improvement and undershooting expectations for continued stabilization. By contrast, the services PMI advanced to 51.4, its highest since December, lifting the composite reading to 51.2 which indicates only modest expansion.
Performance varied by country. French activity weakened across both sectors, weighed down by political uncertainty at home, while in Germany, the improvement was limited to services. On balance, the surveys suggest the region is still struggling to generate meaningful momentum heading into late 2025.
If this trend of subdued growth persists, it could justify one final 25 bp rate cut from the ECB, potentially reducing the deposit rate to 1.75%, Wells Fargo analysts said.
The consensus for the U.K.’s final manufacturing PMI is 46.2, unchanged from the prior reading, while the final services PMI is expected to hold steady at 51.9.
The outlook for manufacturing remains weak, with the sector slipping further into contractionary territory. This reversal from recent months of improving sentiment highlights potential headwinds for near-term growth.
On the monetary policy front, the Bank of England is expected to keep rates on hold through the end of the year.
In the U.S., the consensus for the ISM manufacturing PMI is 49.1, up slightly from the prior 48.7, while the ISM services PMI is expected to hold steady at 52.0.
Both sectors remain under pressure from higher costs and soft demand. Manufacturing has been in contraction for six consecutive months, with tariffs driving up input prices and weighing on investment. Services are also struggling with rising cost burdens, which are dampening hiring appetite.
The consensus for average hourly earnings m/m in the U.S. is 0.3%, unchanged from the prior month. Non-farm employment is expected to rise by 51K compared to 22K previously, while the unemployment rate is forecast to hold steady at 4.3%.
The labor market has cooled noticeably after showing resilience earlier in the year, with unemployment now at its highest level in four years. Hiring appetite remains subdued with job postings below spring levels and Fed regional surveys showing little change in employment plans. Still, layoffs remain scarce, with jobless claims steady around 230K.
On the supply side, labor force participation has struggled to recover from earlier declines, suggesting limited improvement ahead
