1- U.S. Elections:
The U.S. elections are set to take place on Tuesday in a tight race for the White House between Republican Donald Trump and Democrat Kamala Harris, with early voting already underway.
Some analysts suggest that recent gains in Treasury yields and the dollar reflect market optimism for a Trump victory. However, polls indicate a highly competitive race, implying that a Democratic win could lead to market volatility.
Analysts believe that only seven states are truly competitive. However, a poll released on Saturday showed a surprising lead for Harris in Iowa, a state where Trump secured easy wins in the last two elections.
2- Federal Reserve Meeting:
The Federal Reserve is expected to announce a 25 basis point rate cut at the conclusion of its latest meeting on Thursday, with expectations of another cut in December following a 50 basis point reduction in September.
Friday’s nonfarm payroll report confirmed a slowdown in job growth for October due to strikes and weather disruptions, bolstering expectations for a rate cut. Job growth for the previous two months was revised downward, indicating a gradual cooling in the labor market.
Investors will be closely watching the Fed’s statement and comments by Chair Jerome Powell in the post-meeting press conference to see if officials believe the economy remains strong and if they might slow the pace of rate cuts accordingly.
3- Bank of England Rate Cut:
The Bank of England meets on Thursday, and it is expected to cut rates by 25 basis points, following a similar move in August – the first in over four years. This decision could attract additional attention, given it follows the release of a new government budget.
Investors have scaled back their expectations for additional BoE rate cuts next year, as the government’s recent high-spending budget has pushed U.K. borrowing costs to their highest level this year.
Meanwhile, the Reserve Bank of Australia is expected to keep its key interest rate unchanged on Tuesday and through the rest of the year, due to strong economic activity and steady core inflation, prompting a more cautious approach.
