# United States
The upcoming weeks in the capital markets may be turbulent, starting with the recent loss of majority by Japan’s Liberal Democratic Party (LDP), adding to the global uncertainty. Currently, the Japanese yen has decreased by approximately 0.5%, while the US economy prepares for critical data releases. Tomorrow’s trade and inventory data will complete the Q3 GDP report set for Wednesday. The Atlanta Fed estimates a 3.3% GDP growth, close to Bloomberg’s prediction of 3%. Key focus will then move to labor markets with the ADP report preceding the GDP figures. Despite a more modest forecast of 108k job additions according to Bloomberg, there might be the first negative job growth print in nearly four years.
# Eurozone
This week in Europe begins quietly with anticipation building towards the release of the Eurozone’s preliminary GDP numbers for Q3 on Wednesday. Expectations are set for a 0.2% growth, mirroring Q2’s result. More significant is the release of the October CPI data on Thursday, as inflation likely picked from a near-term bottom in September at 1.7%. Given these developments, speculations about a potential 50 basis point rate cut in December might diminish. Over the weekend, the euro rose briefly but continued to face renewed selling pressure, encountering difficulty maintaining levels above $1.08.
# United Kingdom
The United Kingdom’s economic week features the Autumn budget unveiling by the Chancellor. The predominant concern is a potential influx of Gilts supply, as shown by a nearly 10 basis point increase in the 10-year Gilt yield last week. Sterling encountered resistance against the dollar around $1.30 over the weekend and has been demonstrating downward pressure, marking it likely to see further volatility in North American markets.
# China
Chinese markets recently faced little reaction despite reported September declines in industrial profits for the first time this year. September 2023 witnessed a year-over-year decrease of 9%, compared to a 2.3% fall a year earlier. This week, focus turns to the release of China’s October PMI on Thursday, although the effects of recent stimulus efforts may not yet be observable.
# Japan
Japan’s political landscape is in focus following the LDP and Komeito coalition’s failure to maintain a majority in the lower house of the Diet. This outcome fueled the yen’s continued sell-off, marking its fourth consecutive week of losses. Although Prime Minister Iishida intends to remain, the prospect of forming a new coalition remains vague, yet the anticipated fiscal package for economic relief appears more substantial. Key economic indicators such as September’s jobs report, retail sales, and industrial production are awaited, especially ahead of the BOJ meeting on October 31, where there is little expectation for policy shifts.
# Canada
For Canada, the week highlights Thursday’s August monthly GDP report, though it bears limited consequences for the Bank of Canada’s upcoming decision scheduled for December 11. Market sentiment is leaning towards a 45% likelihood of a half-point rate cut. Recently, the Canadian dollar fell in most sessions of the month, reaching levels near CAD1.3900 adjacent to early August highs.
# Australia
In Australia, economic indicators for the week unfold gradually with the primary spotlight on Wednesday’s quarterly CPI data release. However, it is anticipated to be an unlikely influencer of next week’s RBA meeting’s outcomes. The Australian dollar recently touched a low not seen since mid-August and remains under pressure, struggling just above $0.6600.
# Mexico
Mexico disclosed Q3 GDP figures on Wednesday with upcoming trade data revealing a trade deficit of $10.4 billion in the first eight months. The currency faced pressures above MXN20.00 with last month’s high set near MXN20.15. Additionally, the dollar has been testing two-month highs relative to the Brazilian real, indicating broader regional currency challenges.
