Market Movers ahead
The Fed is moving closer to an Evans rule. There is still work to be done before an explicit rule can be endorsed, so we expect no changes at the FOMC meeting.
In the US the final presidential election debate could turn out to be pivotal as Romney and Obama are running neck and neck in the most recent polls.
We expect the release of euro area soft indicators such as flash PMI and Ifo to signal that a recovery is gradually moving closer.
The regional elections in the Basque country and Galicia could pave the way for a Spanish request for a precautionary EFSF/ESM programme in November.
In China the main release will be the flash estimate for the October HSBC manufacturing PMI. We expect an improvement to 49.0 in October from 47.9.
We expect no changes at the Riksbank meeting in the coming week. However, we continue to expect another cut, maybe already in December– or in February.
Global Update
There are tentative signs of a recovery in China, even though GDP growth in line with expectations eased slightly to 7.4% y/y in Q3 from 7.6% y/y in Q2.
Moody’s confirmed the Spanish sovereign rating one notch above junk territory, which helped boost sentiment further.
The week provided a range of upbeat data for the US economy. Both retail sales and the housing market continue to show improvement.
The Bank of England's minutes showed that the MPC committee is split on the need for additional quantitative easing.
