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EUR/GBP's down trend resumed by breaking through 0.8309 last week. Initial bias remains on the downside this week for 0.8201 key support next. Strong support could be seen from there to break rebound. But for now, break of 0.8433 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.

In the bigger picture, down trend from 0.9267 (2022 high) is in progress. Next target is 0.8201 (2022 low), but strong support should be seen there to bring rebound. However, outlook will remain bearish as long as 0.8624 resistance holds even in case of strong rebound. Decisive break of 0.8201 will indicate long term bearish reversal.

In the long term picture, price action from 0.9499 (2020 high) is seen as part of the long term range pattern from 0.9799 (2008 high). Range trading should continue between 0.8201 and 0.9499, until there is clear signal of imminent breakout.

EUR/AUD's fall from 1.6351 extended lower last week despite interim recovery. Initial bias stays mildly on the downside for retesting 1.6002 low. On the upside, however, break of 1.6351 will resume the rebound from 1.6002 to 38.2% of 1.7180 to 1.6002 at 1.6452.

In the bigger picture, as long as 1.5996 cluster support holds (38.2% retracement of 1.4281 to 1.7062 (2023 high) at 1.6000), up trend from 1.4281 (2022 low) is still expected to resume at a later stage. However, decisive break of 1.5996 will argue that the medium term trend has reversed and turn outlook bearish.

In the longer term picture, rise from 1.4281 is seen as the second leg of the pattern from 1.9799 (2020 high), which is part of the pattern from 2.1127 (2008 high). As long as 55 M EMA (now at 1.6003) holds, this second leg could still extend higher. However, sustained trading below 55 M EMA will open up the bearish case for extending the decline through 1.4281 low.

No change in EUR/CHF as it remained bounded in converging range last week. Initial bias stays neutral this week first. On the downside, break of 0.9332 will resume the fall from 0.9579 towards 0.9209 low. On the upside, break of 0.9506 will turn intraday bias to the upside for 0.9579 resistance and above.

In the bigger picture, fall from 0.9928 is seen as part of the long term down trend. Repeated rejection by 55 D EMA (now at 0.9441) keeps outlook bearish for breaking through 0.9209 low at a later stage. Nevertheless, sustained trading above 55 D EMA will confirm medium term bottoming and bring stronger rebound back towards 0.9928 key resistance.

In the long term picture, fall from 1.2004 (2018 high) is part of the multi-decade down trend. Corrective pattern from 0.9407 (2022 low) might have completed with three waves to 0.9928. Decisive break of 0.9252 (2023 low) will confirm long term down trend resumption to 61.8% projection of 1.1149 to 0.9407 from 0.9928 at 0.8851. For now, outlook will stay bearish as long as 0.9928 resistance holds, even in case of strong rebound.

Monday, Oct 21, 2024

Tuesday, Oct 22, 2024

Wednesday, Oct 23 2024

Thursday, Oct 24, 2024

Friday, Oct 25, 2024

• Global markets are reacting to shifts in central bank policies, with the US dollar strengthening and rate cut expectations changing.
• The upcoming week will be busy with the IMF meeting, PMI data releases, central bank announcements, and US earnings reports.
• The US Dollar Index is in focus as technical factors may play a more significant role in its movement amidst a lighter data week.

Week in Review: US Earnings Surprise and Gold Hits Fresh Highs

The week drew to a close with fresh highs for the S&P 500 and Gold while US earnings continued on its impressive path.  As markets digest US earnings, rate cut bets in the US remain steady from a week ago. Markets are still pricing in around a 92.3% chance of a 25 bps cut from the Fed in November, up from 89.5% last week.

Source: SME FedWatch Tool

On the whole, the week itself was a bit of a hit and miss with quite a bit of choppy price action in the early part of the week. However, UK data and the ECB interest rate meeting have seen markets face up to the fact that the global rate environment is set for a correction. The Bank of England (BoE) which was expected to see its policy diverge from the Fed and ECB has found itself in the spotlight as softer inflation figures ramped up rate cut expectations.

The impact of this realization saw the UD Dollar emerge as the front-runner for the week once more. The greenback continued its impressive run of late as we approached the US elections in November.

Looking at fellow commodities and metals, Oil prices continued its slide this week. Softer data globally and renewed concerns around Chinese growth saw both OPEC + and the IEA downgrade their forecasts once more. Silver breached the 32.00 handle and similar to gold, analysts are predicting a further 12 months of bullish price action with a target price for silver set at $45/oz..

The FX front, as mentioned the US Dollar continued its rise this week. The Japanese Yen experienced whiplash price action as news filtered through of a possible rate hike which was immediately rebuked by the BoJ.

Bitcoin has enjoyed a renaissance this week with the world’s largest cryptocurrency having risen to trade at 68500 at the time of writing. This leaves the world’s largest cryptocurrency just 8% of its all-time highs.

The Week Ahead: US Earnings, IMF Meeting, Central Banks and PMI

The week ahead is a busy one underlined by the IMF meeting taking place in Washington next week. This is but one pillar of what is shaping up to be a busy week for markets across the globe.

We have PMI data from a host of countries, a couple of Central Bank meetings, US earnings and geopolitical developments to consider. One has to wonder which event may deliver the greatest impact where markets are concerned and that is a tough question to answer.

Asia Pacific Markets

In Asia, the week is quiet following a busy period that culminated with a data dump from China this week. The biggest event in Asia will likely be Tokyo inflation data. Given the mixed rhetoric around rate hikes by the Bank of Japan (BoJ), the inflation data could meaningfully influence the timing of the Bank of Japan’s next move.

Australia and New Zealand will also be enjoying a quiet week with both countries likely to be affected by external factors in the week ahead. There is a speech by RBNZ Governor Adrian Orr which could affect the NZD.

Europe + UK + US

In developed markets, the European Central Bank has seen an increase in the probability of a 50 bps cut in December as much as they have tried to avoid it. Growth in the Euro Area has become a key area of focus and that makes next week a big one as PMIs will be crucial for the eurozone.

Since May, the composite PMI has generally been declining, except for a temporary boost in August due to the Olympics. September’s reading fell below 50, indicating contraction and heightening fears of a potential recession. While these fears might be exaggerated, an economic slowdown seems likely. The October figures will reveal if there’s any improvement; if not, concerns about a slowdown will intensify. Poor PMIs could send the Euro spiraling lower as market participants are likely to increase bets on a 50 bps rate cut.

The UK has just come off a week that has shifted the narrative for the Bank of England. A significant slowdown in inflation, more importantly services inflation and rate cuts are back on. Service PMIs have been gradually declining, aligning with slower growth rates in the year’s second half. If this trend persists, coupled with the recent slowdown in services inflation, the BoE might accelerate its rate cuts. Keep an eye out for any indications of this during Governor Bailey’s appearances in Washington next week.

The US data calendar is pretty bare next week with the Fed’s beige book being the biggest event. I expect we will hear more chatter from Federal Reserve Policymakers which could add volatility to markets. It will be interesting to gauge if the US Dollar can hold onto recent gains.

Canada will enjoy a bigger week with the Bank of Canada (BoC) rate decision expected on Wednesday. The market expects a big change due to low inflation and weaker activity, but I think the decision will be tight, with most officials cautious about moving too quickly. Markets are pricing in a 91.4% chance that the BoC will deliver a 50 bps cut.

Source: LSEG Refinitiv

Geopolitical developments and US earnings could have a major impact next week. I would also say that any comments from Central Bank Governors at the IMF may be worth paying attention to as policy rates remain a hot topic globally.

Chart of the Week

This week’s focus is back on the US Dollar Index (DXY) as we have a lack of data which could mean the technicals become more important.

Having enjoyed a stellar rally the DXY appears to have finally found resistance at the 200-day MA. There are signs that point to a retracement but given the overarching macro economic outlook the downside might be limited. The Fed are now expected to cut less than the BoE and the ECB which is contributing to the USD rise over the month of October. The RSI on the daily has now flashed a potential sell signal having broken back below the 70 level from overbought territory. This is usually a sign of shifting momentum and that a drop in price may continue.

The DXY is also caught between the 100 and 200-day MA with the 100-day MA likely to serve as a key support area around 103.180.A break below this support level could open up a retest of 102.65 and potentially 102.100.

Now a break above the 200-day MA remains possible and could open up a run toward the 104.oo and 104.50 handle.

US Dollar Index Daily Chart – October 18, 2024

Source:TradingView.Com (click to enlarge)

Key Levels to Consider:

Support:

• 103.18
• 102.65
• 102.00

Resistance:

• 104.00
• 104.50
• 105.00
• 105.63

U.S. Highlights

• The retail sales report once again reinforced the message that the U.S. consumer continues to brush off headwinds.
• Personal income growth, some remaining pandemic savings, and a healthy labor market should help to support trend-like growth in personal consumption expenditures into early 2025.
• A still healthy labor market, and a commitment to data dependency means a measured and deliberate approach to interest rate reductions.

Canadian Highlights

• Canadian inflation made headlines this week with a big downwards move, pushing below the central bank’s 2% target.
• The housing market is starting to stir, with resale activity jumping in September. At the same time, listings have surged, as sellers test out the market following nearly two years of housing market uncertainty.
• The easing in inflation has raised odds that the BoC follows the Fed with an outsized 50 basis point cut at its policy meeting next week.

U.S. – Slow and Steady

U.S. Treasury yields were on the rise again this week (Chart 1) as a brighter picture of the consumer pared back rate cut bets. The September retail sales report once again reinforced the message that the consumer continues to plow ahead, brushing off headwinds from higher rates and two years’ worth of rapid cost-of-living increases. Policymakers and markets continue to assess that interest rates need to fall further, but the timing and level of where they ultimately land remains hotly debated.

Data are streaming in and showing consumers, the backbone of the U.S. economy, are willing and able to spend on goods and services at a healthy pace. Retail sales figures for September rose 0.4% month-on-month, beating out economists’ expectations. Moreover, the “control group” of less volatile expenditure categories surged 0.7% for the month as spending on clothing, personal care and miscellaneous goods surged. With stronger than expected economic news, bond yields surged, rising 6 basis points (bps) through Thursday’s close.

The print suggests plenty of momentum in consumption expenditures into the third quarter, providing a fillip to GDP growth. However, strong doesn’t mean that monetary policy isn’t exerting pressure on households. Sales of motor vehicle dealers were down marginally, as were expenditures on furniture and electronics stores (Chart 2). These categories of goods are more interest rate sensitive, leaving them most susceptible to the still elevated interest rate environment.

However, as we noted this week, the recent upward revision to personal income means households are still holding excess savings that can be deployed. While the funds are mostly concentrated among higher income households that are less likely to spend, their availability means that demand for durable goods could rise as interest rates slowly fall. This sentiment was echoed by Fed Governor Waller this week, when he noted that his “business contacts believe that there is considerable pent-up demand for durable goods, home improvements and other big-ticket items”.

While the labor market is gradually rebalancing, personal income growth is still robust and some remaining pandemic savings should help to support trend-like growth in personal consumption expenditures into early 2025. Carefully balancing strong growth and a healthy labor market against the risks of a flare-up in inflation will likely leave the Fed adopting a relatively cautious and data dependent approach to interest rates – caution Governor Waller reiterated stating, “monetary policy should proceed with more caution on the pace of rate cuts than was needed at the September meeting.”

Policy remains highly restrictive, and more easing is on the way. A still healthy labor market, and a commitment to data dependency means a measured and deliberate approach to policy. This leaves us thinking the Fed will deliver two more quarter point cuts through 2024.

Canada – Canadian Inflation Drops Below Target

It was a busy data week ahead of the Bank of Canada’s (BoC) upcoming policy meeting. Canadian Consumer Price Index (CPI) inflation made headlines with a big downwards move in September, pushing below the central bank’s 2% target (Chart 1). We also got another reading on the housing market, which is starting to show signs of life in response to recent rate cuts. Financial markets have responded, pricing a higher likelihood that the BoC will swing for a larger 50 bp cut.

Headline inflation clocked in at 1.6% year-on-year (y/y) in September, reaching below the central bank’s target for the first time since early 2021. While this drop was expected given September’s 7% monthly drop in gasoline prices, it speaks to the impact of the central bank’s hiking cycle on the Canadian economy. The interest sensitive goods category is firmly in deflation at -1% y/y, whereas inflation excluding the impact of shelter prices is running at just 0.4% y/y.

In terms of core inflation, the average of the BoC’s two metrics is holding steady at 2.4% y/y. Encouragingly, the three-month annualized pace of core eased to 2.1% (from 2.3% in August). This points to further improvement in the annual pace of core inflation in the coming months. Further adding to this narrative is the fact that other measures of core inflation – CPI excluding food and energy and the BoC’s old core measure (CPIX) – are sitting at 1.6% on a three-month basis. This cements the need for more rate cuts.

The biggest beneficiary from the BoC’s easing cycle is typically the housing market. While the market response to rate cuts hasn’t come to a boil like many would have expected, it is starting to stir. Housing sales jumped nearly 2% in September and are up 6% since rate cuts started in June. But at the same time, listings are up over 9%, as sellers test out the market following nearly two years of housing market uncertainty. This has the sales-to-listings ratio on the decline, which has limited the potential acceleration in house price growth (Chart 2). We expect this to give way in the coming months once the recent wave of listings has been cleared. This should jolt the housing market, pushing sales and prices higher.

That brings us to the BoC’s policy decision next week. The bank has executed three straight cuts of 25 bps, highlighting the need to help economic growth reaccelerate and avoid a hard landing. The argument for a 25 bp cut is that there is still clear strength coming from the jobs market, with wage growth running well above inflation. This will support consumer spending, which we think is starting to accelerate heading into the holiday shopping season. Now, the case for a 50 bp move is coming from the fact that Q3 GDP growth is tracking well below the BoC’s forecast (even if it should rebound in Q4) and headline inflation is below target. The central bank will have to downgrade its forecast for both on Wednesday and can use this as cover to justify a 50. Despite market pricing shifting towards 50 bps, we still think 25 bps is the right move given the arguments above. Next week’s decision is turning out to be a nail biter, but either way, rates will continue to head lower.

Summary

United States: Fall Data and It's the Same

• Retail sales came in stronger than expected in September, industrial production was weaker than expected and residential construction softened. The fall data mix is a continuation of the underlying trends in economic growth—consumers are strong, while interest-rate-sensitive sectors are weak.
• Next week: LEI (Mon.), New Home Sales (Thu.), Durable Goods (Fri.)

International: European Central Bank Delivers Back-to-Back Rate Cuts, Hints at More to Come

• The European Central Bank cut its policy rate 25 bps to 3.25% at this week's meeting and said the disinflationary process is well on track. Considering balanced comments from the ECB and a subdued economic backdrop, we expect the ECB to cut rates at every meeting through at least next March. China's Q3 GDP slowed a bit less than forecast to 4.6% year-over-year, while several countries reported slower inflation this week, including Canada, New Zealand, Japan and the United Kingdom.
• Next week: Bank of Canada Policy Rate (Wed.), Eurozone PMIs (Thu.)

Interest Rate Watch: U.S. Dollar Gains on Re-Think of Fed Policy Easing

• A run of stronger-than-expected data recently have led market participants to dial back their expectations of Fed policy easing in the coming months. This re-think has led to dollar appreciation in recent weeks.

Topic of the Week: Hurricanes Milton and Helene Challenge the Southeast Economy

• Although Hurricane Helene and Hurricane Milton have now passed, the social, environmental, demographic and economic damages are still being tallied. The most acute economic impacts are likely to be felt in the near-term, as the repercussions of the storms weigh heavily on the localities most effected. Over the longer run, rebuilding efforts and an influx of government aid should help bring about a recovery.

Full report here.

The Bank of Canada is expected to accelerate the pace of interest rate cuts with a 50-basis point reduction to the overnight rate to 3.75% from 4.25% on Wednesday.

An underperforming Canadian economy had already pushed the BoC to lower interest rates earlier than most advanced economy central banks. Three consecutive 25 bps cuts that began in June are already in the books. Yet, the economic backdrop has continued to soften, and risks to inflation look increasingly tilted to the downside of the BoC’s 2% target.

Headline consumer price index growth slowed to below 2% year-over-year for the first time since the pandemic in September, in part reflecting lower energy prices, but also a sign of further easing in broader inflation pressures. Downside inflation risks continue to build as the economy underperforms. Q3 gross domestic product growth is tracking well below the BoC’s 2.8% forecast from July, the unemployment rate is running a percentage point above year-ago levels and job openings are still falling rapidly into September.

Policymakers look increasingly worried that the current high level of interest rates is causing more economic pain (higher unemployment and lower per-capita GDP) than is necessary. Governor Tiff Macklem has explicitly said that economic growth needs to accelerate to avoid price growth slowing below the 2% target, and that they care as much about inflation below target as above. Interest rate changes impact the economy with a substantial lag, increasing the urgency to get rates back down to a more neutral policy quickly, which is somewhere in the 2.25% to 3.25% range, according to BoC’s estimates. We expect the BoC will ultimately need to go further than that to prevent the softening in the Canadian economy from stretching into the second half of 2025. Our base case assumes another 50 basis point cut in December and reductions down to 2% by mid next year.

Week ahead data watch

We look for Canadian August retail sales next Friday to show a 0.5% increase from July, in line with Statistics Canada’s advance estimate a month ago and consistent with industry reports that vehicle sales rose. But our own tracking of card transactions is pointing to a pullback in September.

• Bank of Canada meets; may opt for bigger 50-bps cut
• October flash PMIs to set the mood amid some growth concerns
• A relatively quiet week otherwise, with mostly second-tier releases

BoC to likely cut by half a point

Expectations that the Bank of Canada will cut rates by 50 basis points at its October meeting firmed up after the latest CPI data. Nevertheless, markets are not fully convinced of an outsized move, hence, there is a little bit of uncertainty heading into Wednesday’s decision by Canada’s central bank.

On the face of it, the Canadian economy is not in great shape. Growth has been sluggish at best since late 2022 and the jobless rate has jumped from a post-pandemic low of 4.8% to around 6.5%. More importantly, the Bank of Canada has seen great progress in getting inflation down, which fell to a 3½-year low of 1.6% in September.

Governor Tiff Macklem even signalled at the last meeting that policymakers are “prepared to take a bigger step”. Furthermore, the BoC’s own survey indicates businesses remain quite pessimistic amid weak demand.

Yet, there are signs that the worst may be over as GDP growth has been stronger this year and employment is rising again after two months of declines. Some investors were also disappointed that the underlying measures of inflation were flat in September. All this could be seen as limiting the scope for further 50-bps reductions in the overnight rate even if policymakers back one at their October gathering.

For the Canadian dollar, any hawkish surprises could provide a much-needed boost as it’s depreciated by about 2.6% against the US dollar from its September peak. But a 50-bps cut is the most likely outcome even though it’s only 75% priced in. The loonie could therefore come under pressure if the expectations are confirmed.

But investors will also be on the lookout for any hints about future cuts. If Macklem keeps the door open to further 50-bps reductions, this would put the loonie at risk of a deeper bearish trend. However, if he sounds somewhat more upbeat about the outlook, investors might price out some rate cuts in the months ahead, potentially lifting the loonie.

Will Eurozone PMIs worsen the euro’s woes?

Last month’s PMI reports for the Eurozone were so bad that it prompted an about-turn by the European Central Bank on the likelihood of a back-to-back cut in October, having signalled the opposite at the September meeting. The ECB has now cut rates three times, totalling 75 bps, and more easing is on the way, as the risks to inflation and growth are tilted to the downside. If the flash PMI numbers for October are equally disappointing, investors are sure to reinforce their bets of additional rate cuts over the coming months.

High interest rates have taken their toll on the Eurozone economy but as businesses start to feel the relief of lower borrowing costs, the block’s largest economies – France and Germany – are grappling with other issues. German manufacturers are struggling to stay competitive on the global stage, while weak demand in China is adding to their pain. In France, the political turmoil has created uncertainty for businesses.

On the bright side, German exports to China may get a boost from Beijing’s recently announced measures to support growth, while the political deadlock in France appears to have ended for now.

This may bode well for the outlook, but the present situation in Europe remains very worrying for policymakers. So unless Thursday’s PMIs offer a glimmer of hope that business confidence is returning, the euro is likely to remain on the backfoot. Traders will also be keeping an eye on Friday’s Ifo Business Climate out of Germany.

Pound may find some support in UK PMIs

UK economic indicators have been somewhat mixed lately, but the picture is much clearer for inflation. Headline CPI fell below the Bank of England’s 2% target in September and there was a significant drop in services CPI too. Even if growth picks up momentum again, the BoE will almost certainly continue cutting rates.

However, the strength of the economy will still determine the pace of easing, and this is key for sterling as the Bank of England may not have to cut rates as many times as other major central banks if growth holds up, bolstering GBP crosses in the medium term.

Both the services and manufacturing PMIs ticked slightly lower in September but remained above 50. An improvement in October could help the pound recoup some of its recent losses on Thursday. But any rebound will struggle to go far with expectations high that the BoE will cut rates on November 7. The pound will also be paying close attention to Governor Bailey’s remarks as he is scheduled to make several appearances over the coming week.

Another light US calendar week

Over in the US, the flash PMIs will be vital too. Investors will be dissecting the details of the S&P Global survey to get a fresh update on employment conditions and price pressures across the services and manufacturing sectors.

The Fed is widely expected to trim rates again this year but following the recent run of upbeat data, not only has a 50-bps cut been priced out, but also a 25-bps reduction in both November and December is not seen as a done deal by some investors. If the PMIs extend the streak of upside surprises, the US dollar may climb to fresh highs against its peers as investors further scale back rate cut bets.

However, with no big releases due until the last week of October, any reaction is likely to be modest, with traders probably more preoccupied with corporate earnings. Other data will include existing home sales on Wednesday, new home sales on Thursday and durable goods orders on Friday.

Is more Chinese stimulus in the pipeline?

Elsewhere, CPI numbers for the Tokyo region out on Friday will be the only highlight in Japan, and in Australia, traders will be watching Thursday’s PMI figures. The Australian dollar could benefit from positive PMIs, having been lifted by the solid employment readings for September.

China will also remain in the spotlight as the PBOC will set its loan prime rates on Monday, and there could be further announcements on fresh stimulus policies targeted at the property market and consumers. Any surprises on this front could keep the positive risk sentiment going should markets struggle for direction.

ECB's widely anticipated 25bp rate cut did not end up rocking the markets, as Lagarde delivered little concrete guidance on what the central banks' next steps will be. Markets saw her remarks slightly on the dovish side, as she noted inflation risks 'may' be slightly tilted to the downside. Over the past weeks, continuing weakness in PMIs, downside surprise in September HICP and declines in markets' inflation expectations have all supported the case for faster easing and current market pricing implies even a modest 20% probability of a larger 50bp cut in December. Pace of cuts in 2025 remains uncertain as well, but we stick to our call for quarterly 25bp reductions, which would set the deposit rate at 2.00% by the end of next year. Read more from our full ECB Review, 17 October.

Prediction markets have continued to signal rising probability of Donald Trump clinching victory in the upcoming US elections. At the time of writing, Polymarket sees odds of Trump's win at nearly 61%. Republican 'clean sweep' is seen as the most likely total outcome with 43% probability, followed by a Harris win with a divided Congress at 24%. That said, the latest swing state polls signal the race remains closer than prediction market odds suggest, according to RealClearPolitics. Trump is in the lead in all the seven most important swing states, but in 5/7 states, he leads by less than 1 percentage point, which falls well within typical margins of error (usually 2-4%).

Either way, we think a Republican sweep could provide near-term support for US equities and the broad USD, and especially the latter remained on a strong footing this week. US September retail sales came out on the strong side of expectations, with control group sales (which strip away the most volatile categories) growing +0.7% m/m SA. Unusually positive seasonal adjustment might have distorted the monthly growth figure higher - in non-seasonally adjusted y/y terms growth cooled down to 2.7% (from 3.9%). But even so, it seems US consumer spending remains on a healthy footing. We discussed possible near-term distortions to US data releases in RtM USD - Not too hot, not too cold, 15 October.

Chinese Q3 GDP growth was slightly stronger than expected at 4.6% y/y (from 4.7%), but make no mistake, latest data continues to underpin the story of weakening momentum in consumer spending. CPI data from last weekend showed price pressures still hovering near deflation, latest export and credit growth figures were weaker than expected and housing market shows no real signs of recovery with very weak sales volumes and declining prices. All-in-all, we think the latest round of data underscores the need for much stronger stimulus going forward, Finance Ministry's press conference last Saturday still lacked clear details on what to expect on the fiscal stimulus front.

Next week will be calm before the storm of US elections, nonfarm payrolls and FOMC meeting all within the first week of November. Main data focus will be on October flash PMIs on Thursday, which will likely signal continuing contraction in manufacturing activity and modest growth in services on both sides of the Atlantic. Chinese Loan Prime Rates will likely be cut by 20bp on Monday following a 30bp cut to the 1-year Medium Term Lending facility rate earlier. FOMC participants will also have their final chances to provide guidance next week ahead of blackout starting on Saturday 26 October.

Full report in PDF.