Market movers today

After the surprisingly dovish policy message from Bank of England last week, the UK jobs report for September will be interesting today, as the past couple of months have shown decreasing employment.

In Continental Europe, the ZEW indicator for November will be released. Last month the expectations – current conditions spread turned positive again for the first time since May, boding well for a further stabilisation in PMI manufacturing. A further improvement today will strengthen this signal.

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Central bank speakers from the ECB (Coeuré and Mersch) and the Fed (Harker and Clarida) will also be scrutinised by markets for any news. Yesterday we updated our Fed call, now expecting only one more cut in 3 to 6 months (previously three more cuts).

In Scandinavia, Swedish labour statistics and inflation expectations as well as Norwegian Q3 GDP and wage growth figures are in focus (see next page).

Selected market news

We have changed our call on both the Federal Reserve and Bank of England. We now expect only one rate cut from the Federal Reserve in 3 to 6 months (previously three more cuts). We expect the Federal Reserve to be on hold and the March FOMC meeting is probably the earliest possibility for a rate cut. See more in our FOMC update , 11 November.

Following the dovish policy signal sent by Bank of England last week, we now expect it to deliver a 25bp cut at its next ‘big’ meeting in January 2020, taking the Bank Rate to 0.50%. This forecast does not depend on the election outcome, although we believe a cut would be more likely in the event of a hung parliament. See more in our BoE update, 11 November.

We have seen modest movement in the Asian equity markets this morning, as we are awaiting more news on the trade deal between the US and China. There has been a modest decline in US Treasury yields in Asian trade this morning, so we expect a modest positive opening in the European fixed income markets.

Furthermore, the ECB has started QE and there was solid buying in CSPP and PSPP programmes in the first week of November.

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