G10 central banks holding steady

Summary

United States: Remarkable resilience

• The U.S. economy expanded at a stronger-than-expected pace in Q3, with real GDP increasing at a robust 4.9% annualized rate. Data on consumer spending, durable goods, initial claims and new home sales also continued to show remarkable resilience, given higher interest rates and tightening credit conditions.

• Next week: ISM Indices (Wed. and Thu.), FOMC Decision (Wed.), Employment (Fri.)

International: G10 Central Banks holding steady

• This week's monetary policy meeting saw key G10 central banks hold interest rates steady at their latest announcements. The Bank of Canada held its policy rate at 5.00% and, while keeping the door open to further tightening, said past rate hikes are increasingly dampening economic activity and relieving price pressures. The European Central Bank held its Deposit rate at 4.00% and said the current level of interest rates should eventually see inflation return toward target, while also observing signs of weakness across the Eurozone economy.

• Next week: China PMIs (Tue.), Bank of Japan Policy Decision (Tue.), Eurozone CPI (Tue.)

Credit market insights: Interest rates are small potatoes for small business

• Earlier this month, Patrick Harker—the Federal Reserve Bank of Philadelphia president and a well-known dovish voter on the FOMC—generated significant publicity with his sentiment that the Fed should not consider additional rate hikes, given many small businesses are straining to endure tightening to date. But what does recent survey evidence indicate for the current state of small business lending and credit availability?

Topic of the week: The negotiations continue: EU-US trade

• European Union and United States trade officials have been at the negotiating table for months trying to settle on a trade deal between the two economies. The EU is seeking for the U.S. to end Trump-era tariffs as well as to ease some of the impact of recent U.S. green subsidies on the bloc.

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