The upcoming week for US data should be relatively quiet, both in terms of the economic data as well as the Fed speaking docket. Most relevant data is Fed's Beige Book being released on 23rd Oct. The general assessment on economic activity in the Beige Book likely improved modestly. Initial jobless claims this week is likely to come at 245k. Initial jobless claims will likely remain elevated as some residents were still without power last week in states affected by Hurricanes Helene and Milton. The S&P PMIs for US might come a tad soft for October. In Eurozone data, we continue to expect weak Eurozone flash PMIs. In Asian data, Tokyo CPI data to come stronger in the core core data. The high light for this week is Bank of Canada's rate decision on 23rd Oct where we expect a 50 bps cut to 3.75%. The downside surprise in September headline inflation and the Federal Reserve’s 50 basis-point rate cut gives the Bank of Canada cover to accelerate its own cutting pace. The decline in wage growth and aggregate hours worked suggest an economy in excess supply. We think below-target headline inflation and persistently declining living standards will tip the balance toward swifter cuts. A 50bp October cut, followed by five 25bp consecutive cuts is our base case. Our terminal rate forecast is 2.50%, which the BoC is likely to reach in June 2025.
