📆 Monday, November 4
► European stock futures remained steady ahead of the upcoming US presidential election on 5 November, the potential impact of which on global trade and politics is the focus of attention. In addition, the Bank of England is expected to cut the key interest rate by 25 basis points to 4.75% on 7 November as the UK struggles with inflationary pressures. Spain's manufacturing PMI beat expectations, rising to 54.5 in October, signaling growth in output and new orders. However, Italy's PMI came in below expectations at 46.9 (48.6), while Germany's PMI improved from a very low level (43.6 from 40.6 the previous month and 42.6 expected). The French PMI (44.5 vs. 44.5 expected) and the overall Eurozone PMI (46.0 from 45.0 the previous month 45.9 expected) were close to expectations. Political uncertainty surrounding the outcome of the US election is making investors in Europe cautious and preventing them from making major bets.
► US markets face a pivotal week with the Federal Reserve interest rate decision (DO) and the presidential election on the horizon. The Fed is expected to cut interest rates by 25 basis points, while weak labor market data is being affected by hurricanes and a major strike. Treasury yields have fallen but remain high on expectations of continued inflationary pressure under a possible Trump administration. The post-market rally in tech stocks, including Amazon and Intel, provided a positive boost on Friday, while the USD weakened. Polls suggest that Kamala Harris is gaining ground, prompting investors to rethink earlier bets on Trump and reverse a slightly reversed ‘Trump trade’ that favored the USD and pushed up yields.
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