Week Ahead for FX, Bonds: U.S. Midterms, Jobs Data in Focus; BOE Expected to Raise Rates

By Dow Jones Newswires staff

Below are the most important global events likely to affect FX and bond markets in the week starting Nov. 2.

The U.S. midterm elections will likely take center stage in the week, while the latest monthly U.S. jobs data could give clues on how soon the Federal Reserve could raise interest rates again.

The Bank of England is expected to raise interest rates, while rate decisions are also due in Sweden, Norway, Brazil and Mexico.

In Asia, central bank decisions in Australia and Malaysia will take center stage, with the Reserve Bank of Australia widely expected to raise interest rates for a fifth time this year. Bank Negara Malaysia is expected to hold rates steady.

U.S.

The U.S. midterm elections are due on Tuesday. The results of these will be closely watched by investors as Democrats are expected to perform well, with potential consequences for policy going forward. Democrats are widely expected to secure control of the House, while there's a possibility that the party also takes control of the Senate.

"A Democratic sweep...could be seen as slightly negative for the U.S. dollar from a few angles, from higher risk of government shutdown and gridlock on debt ceiling negotiations to potential damage to already shaky AI-related sentiment," ING foreign exchange strategist Francesco Pesole said in a note.

U.S. jobs data will also be in focus, particularly the latest nonfarm payrolls report for October, due on Friday, as investors gauge the likely timing and pace of future interest-rate rises based on evidence regarding the strength of the U.S. economy.

The Federal Reserve left interest rates on hold at its recent meeting but most analysts expect rates will rise in December. U.S. money markets price a 76% probability of a quarter-point rate hike on Dec. 9 and fully price at least two increases within the next 12 months, LSEG data showed. Job creation might have to be particularly weak for investors to meaningfully change these expectations.

"We expect sluggish employment growth and a stable unemployment rate," analysts at LBBW said in a note. Despite this, a 25-basis-point interest-rate hike by the Fed on Dec. 9 "is still considered very likely," they said.

Ahead of Friday's jobs data, further indications on the health of the U.S. jobs market will come with U.S. JOLTS job opening figures for September on Tuesday, ADP private payrolls data for October on Wednesday and weekly jobless claims Thursday.

The ISM surveys for October on manufacturing on Monday and services on Wednesday, followed by the University of Michigan's preliminary November consumer sentiment survey on Friday, will provide a more up-to-date picture of how the U.S. economy is faring.

Canada

Canadian jobs data for October are due Friday. These will give a picture of the health of Canada's economy after the Bank of Canada recently raised interest rates by 25 basis points.

Money markets price a 55% chance of a back-to-back increase in December, LSEG data showed.

Nick Rees, head of macro research at Monex, expects that underlying inflation is too soft and the labor market too weak to justify another hike, he said in a note.

Latin America

Brazil's central bank will announce its policy decision on Wednesday in the wake of President Luiz Inacio Lula da Silva's surprise election victory.

"We expect Banco Central do Brasil to pause at its meeting on November 4 to gauge the inflation impact of the market sell-off triggered by Brazil's presidential election," Standard Chartered economist Dan Pan said in a note.

If sharp depreciation of the Brazilian real is sustained, it will likely raise near-term inflation pressure, the analyst said. The loose fiscal stance expected during Lula's fourth term might lead to a further increase in long-term inflation expectations, Pan said. Nevertheless, there is unlikely to be a sharp enough fiscal deterioration to push BCB back to raising rates, the analyst added.

Mexico's central bank, or Banxico, announces a rate decision on Thursday, and is expected to leave its key rate at 6.50%.

"Since the September meeting, the case for additional easing has weakened. Recent activity indicators suggest a faster closing of the output gap, the currency depreciated, while core inflation has recently re-accelerated," Citi analysts said in a note.

Eurozone

Eurozone provisional inflation data for October due on Wednesday will be the most closely-watched eurozone indicator of the week. This comes after the European Central Bank left interest rates unchanged at its October meeting, with money markets pricing a 63% probability of a quarter-point rate hike in December, LSEG data showed.

Investec forecasts that eurozone headline annual inflation will rise to 3.9% and reach 4.0% by the end of the year. LBBW analysts expect it will have hit 4.0% already in October.

The inflation data will be an important indicator for the ECB, Investec economist Ryan Djajasaputra said in a note. ECB President Christine Lagarde said the central bank had debated a hike in October and it is therefore likely gearing up towards more tightening in December, he said.

Final October manufacturing purchasing managers' surveys for France, Germany and the eurozone will be released Monday, followed by the equivalent surveys for services activity on Wednesday.

German September manufacturing orders are released Thursday, alongside French September industrial production figures and eurozone PPI inflation, also for September.

Eurozone September retail sales and German September industrial production data are due Friday.

U.K.

The main event in the week will be the Bank of England interest rate decision on Thursday, where markets widely expect the central bank to increase interest rates by 25 basis points to 4.0%.

"[The BOE] will deliver a required tightening that had already become clear at the prior meeting," Allan Monks, a senior economist at J.P. Morgan, said in a note.

Nonetheless, analysts expect the BOE to push back against current market expectations for more than four rate hikes over the coming 12 months, given that there is little evidence of second-order inflation effects yet.

"There is a high bar for the BOE to deliver tightening in line with market pricing," BNP Paribas economist Dani Stoilova said in a note.

The final U.K. manufacturing purchasing managers' index data for October will be released Monday, followed by the final services purchasing managers' figures on Wednesday.

Scandinavia

Sweden's central bank, the Riksbank, will announce a policy decision on Wednesday. Markets price an 87% chance of a 25 basis points rate increase to 1.75%, LSEG data showed.

The central bank left rates on hold last month but signaled it could raise rates later this year.

The Riksbank faces an improved growth outlook, Bank of America analysts said in a note. With data doing little to challenge the Riksbank's indication of future tightening, "we continue to expect a hike...and another one in the first quarter of 2027," they said.

Norway's Norges Bank will announce an interest-rate decision on Thursday.

At its last meeting in September, Norway's central bank raised rates by 25 basis points. It is likely to leave its policy rate unchanged at 4.50% on Thursday and signal that rates will remain elevated for some time, Nomura analysts said in a note.

"Although underlying inflation remains too high, we expect it to slow in the coming months." The current policy rate is restrictive, putting dampening pressure on inflation, they said.

Central and Eastern Europe

The National Bank of Poland announces a policy decision on Wednesday. Headline inflation has been running above the central bank's target in recent months but there is little evidence of broader price pressures building, affording the NBP time to respond, ING analysts said in a note.

"Our baseline scenario assumes that NBP rates would remain unchanged through the end of this year." Two rate rises in the first quarter of 2027 are possible if the energy price shock continues and inflation remains elevated, they said.

The Czech National Bank's policy decision is on Thursday, with markets pricing an 84% chance that the central bank will raise interest rates by 25 basis points to 4.0%, LSEG data showed.

Headline and core inflation have exceeded the central bank's forecasts, while accelerating wages and higher energy and food prices point to further price pressures, ING analysts said in a note.

"The combination of persistent inflation pressures and robust consumption should keep further monetary tightening on the agenda, with the December and February meetings potentially in play depending on incoming inflation data."

Japan

Japan's monetary policy outlook will remain in focus in the week, with investors looking for clues on the Bank of Japan's next interest-rate increase after the central bank held rates steady at 1.25% in its October meeting, while signaling that further tightening remains possible.

On Thursday, the Bank of Japan is scheduled to release the minutes of its September meeting, at which it raised interest rates by 25 basis points to 1.25% to keep persistent inflation in check.

The Ministry of Finance is slated to auction 10-year government bonds Thursday, testing investor demand as markets assess the prospect of higher borrowing costs.

Japanese markets will be closed Tuesday for the Culture Day holiday.

China

A quiet data week is in store for China, with PMIs the primary indicator of note.

On Monday and Wednesday, private gauges of China's manufacturing and services sector activity are due. The RatingDog PMIs compiled by S&P Global, which survey more export-oriented businesses, are likely to keep outperforming official counterparts.

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October 30, 2026 13:08 ET (17:08 GMT)