Wall Street is facing caution due to the rise in US Treasury yields, leading to a potential weekly loss. This is coupled with profit-taking in major technology stocks ahead of their upcoming earnings reports. The uncertainty surrounding the US elections further adds to the cautious atmosphere.
Investors will be closely watching key economic indicators and corporate earnings reports in the coming week. These reports will shape market expectations and impact stock performance across various sectors.
On October 30, Australia will release its monthly Consumer Price Index (CPI) indicator. Analysts anticipate a modest increase in inflation, with a projected quarter-on-quarter increase of 0.4% for the September quarter. This could potentially ease the annual rate to 2.8%. The trimmed mean inflation is also projected to rise by 0.7% QoQ, potentially easing the annual rate to 3.4%. A lower-than-expected trimmed mean could support the case for a rate cut by the Reserve Bank of Australia.
The US will release its advance estimate for third quarter Gross Domestic Product (GDP) on October 30. Expectations suggest a growth rate of 3.0% QoQ, indicating resilient economic conditions that could support a gradual easing of the Federal Reserve's monetary policies. The Atlanta Federal Reserve's GDPNow model projects an even stronger growth of 3.4%.
The Eurozone will unveil its Q3 flash GDP figures on October 30. The previous quarter saw a modest expansion of 0.2% QoQ, with an annual growth rate of 0.6%. Concerns have been raised about the region's economic stability, particularly due to the contraction in Germany's GDP. The European Central Bank has implemented interest rate cuts to address declining growth indicators and inflation.
The Bank of Japan is expected to maintain its current interest rate stance in its upcoming decision on October 31. Governor Kazuo Ueda has emphasized the need for sustainable progress toward the 2% inflation target. Economic projections will be closely monitored for insights into potential future rate hikes.
On November 1, the US will release its September non-farm payroll report. It is expected to show a slowdown in job growth, potentially influenced by factors such as Hurricane Helene and port strikes. The unemployment rate is expected to remain steady at 4.1%, while average hourly earnings may see a slight decline to 0.3% month-on-month. The Federal Reserve will consider this labor report in its rate decision, aiming to balance employment strength with inflation control. The overall trend in labor conditions remains resilient, which could support expectations for smaller rate cuts in the near future. Market participants will closely monitor these developments, which could have significant implications for traditional finance and cryptocurrency markets.