EUROPEAN SESSION
In the European session, we have the SNB rate decision and the German IFO survey. The SNB is widely expected to keep the policy rate unchanged at 0.00%, so the focus will be on inflation forecast, assessment of the oil shock, CHF intervention language and guidance for 2027.
Inflation has surprised to the upside recently but a large part of the increase was energy-related, with petroleum prices up 25.2% YoY. Excluding petroleum, headline inflation was only around 0.3%, which suggests the shock has not yet generated second-round effects. Therefore, the consensus expectation is for the SNB to raise its near-term inflation projections, but not dramatically alter the medium-term outlook.
CHF intervention language might also moderate further given the significant depreciation in the past few months. This could provide a short-term boost for the franc but should’t change the overall trend.
The German IFO survey is expected to show business climate rising further to 89.0 vs 88.8 in the prior month. The IFO is correlated with the German Composite PMI given that they measure basically the same thing, although they occasionally diverge due to differences in survey design and sector weightings. The data is not going to change anything for the ECB, so the market reaction will likely be muted.
AMERICAN SESSION
In the American session, we get the US Jobless Claims figures and we have also the Trump-Xi meeting. Initial Claims are expected at 201K vs 196K prior, while Continuing Claims are seen at 1740K vs 1730K prior. The data won’t change anything for the Fed at this point, so the market reaction will likely be muted. Only a significant upside surprise in initial claims could trigger notable moves on a “growth scare”, but the moves could be faded quickly given the strength in all the other data.
The Trump-Xi meeting is not expected to provide major breakthroughs. The US and China have already agreed to extend the current trade truce from November 10 to January 10, 2027, with Treasury Secretary Bessent saying the extra time is intended to allow negotiations on a potentially broader deal.
CENTRAL BANK SPEAKERS
08:10 GMT/04:10 ET – Fed’s Williams (neutral – voter)09:30 GMT/05:30 ET – BoE’s Dhingra (dove – voter)12:30 GMT/08:30 ET – Fed’s Barkin (neutral – non voter)12:50 GMT/08:50 ET – Fed’s Hammack (hawk – voter)13:30 GMT/09:30 ET – BoE’s Breeden (neutral – voter)14:00 GMT/10:00 ET – BoE’s Lombardelli (neutral – voter)14:10 GMT/10:10 ET – Fed’s Paulson (neutral – voter)
This article was written by Giuseppe Dellamotta at investinglive.com.