Economics week ahead

In the U.S., the September ISM Services index is expected to ease modestly while continuing to signal expansion, with particular attention on whether price pressures remain elevated. In Canada, the labor market likely rebounded in September, although broader trends still point to a cooling pace of employment growth. Elsewhere, we expect the Reserve Bank of India to begin its tightening cycle, bringing the policy rate to 5.50%. September inflation reports in Mexico and Brazil should show some firming in headline price growth, although much of the pickup reflects temporary and seasonal factors.

U.S. week ahead

ISM Services • Monday

The September ISM Services report should continue to point to a healthy, expanding services sector, though we look for some moderation after August's surprisingly strong gain. We expect the headline index to slip to 54.5 from 55.4, giving back some of the recent gain while remaining comfortable above the 50 breakeven threshold. Regional Fed business surveys remained soft in September, suggesting some easing in activity, while the nearly four-point jump in new orders last month may prove difficult to sustain. Beyond that, the employment component could also edge lower after the September payroll data showed relatively modest hiring across service-providing industries.

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