Monday kicks off with manufacturing PMI releases for the Eurozone, U.K., Canada, and the U.S., followed by services PMI data two days later for some of the same countries and regions.
On Tuesday, the highlight will be the RBA’s monetary policy announcement in Australia, while New Zealand will release its quarterly employment change and unemployment rate.
On Thursday, attention will turn to the U.K. for the BoE’s monetary policy announcement, and Friday will bring Canada’s employment change and unemployment rate figures.
Throughout the week, several FOMC members are scheduled to deliver remarks. The ongoing U.S. government shutdown, now in its fifth week, has significantly disrupted the release of key economic data, leaving the FOMC in a difficult position ahead of its December meeting with limited information to guide policy decisions.
In the U.S., the consensus for the ISM manufacturing PMI is 49.4 versus the prior 49.1, while the ISM manufacturing prices index is expected at 62.4 versus 61.9 previously.
The U.S. manufacturing sector continues to be in contractionary territory and is expected to remain so. Although September saw the mildest decline in seven months, the index has signaled contraction in nearly every month since November 2022, apart from a brief rebound earlier this year.
The modest uptick expected for October may suggest that firms are gradually adapting to trade-related pressures or working through order backlogs. However, according to analysts at Wells Fargo, survey commentary continues to highlight persistent challenges such as elevated input costs, ongoing tariffs and a generally uncertain business environment.
At this week’s meeting, the RBA is expected to keep its cash rate on hold. Analysts suggest that another rate cut could come as early as February, but this would likely require a softer labor market.
One of the main reasons for maintaining the current rate is the hotter-than-expected inflation data. Although inflation remains above target, analysts note that monetary policy is still considered restrictive, and the RBA is not finished with its easing cycle. Rate cuts are expected to remain on the table throughout next year.
The updated inflation outlook begins from a higher base but is projected to fall below the midpoint of the RBA’s 2-3% target range, reaching around 2.3% at its low point. Under the base-case scenario, Westpac analysts expect a first 25 bp cut in May 2026, lowering the cash rate to 3.35%, followed by another reduction in August to 3.10%. If the RBA delays easing beyond May, an additional cut to roughly 2.85% could take place later in 2026.
Regarding the labor market, some softening is anticipated, with the unemployment rate expected to rise to around 4.6% by late next year. While consumer spending has remained resilient, being supported by firm consumption indicators and card spending data, analysts caution that this momentum could fade without further monetary support.
In New Zealand, the consensus for employment change q/q is 0.1% versus the prior -0.1%, while the unemployment rate is expected to rise from 5.2% to 5.3%.
A modest increase in unemployment is anticipated in this week’s data. According to Westpac analysts, although monthly employment figures showed some improvement, hiring activity remained largely flat over the quarter and was insufficient to offset continued growth in the working-age population.
This imbalance suggests that labour market slack is emerging through a combination of slightly higher unemployment and a dip in participation rates. Consequently, wage growth has eased, aligning more closely with an inflation rate near 2%, indicating a gradual cooling in underlying labour market pressures.
In the U.S., the consensus for the ISM Services PMI is 50.8 versus the prior 50.0.
The services sector appears to be holding up, though some softening is likely in this week’s data. Weakness in production and new orders has been offset by longer delivery times and steady backlogs.
According to Wells Fargo analysts, industry feedback continues to highlight pressure from elevated borrowing costs and tariffs, while demand in technology-related services, particularly AI and cloud infrastructure, remains a notable bright spot.
At this week’s meeting, the BoE is expected to keep the Bank Rate unchanged at 4.00% and maintain a cautious stance, as policymakers continue to weigh inflation risks against signs of underlying economic resilience.
Inflation remains a key concern in the U.K., particularly in the services sector, where pressures may persist despite moderating wage growth and a softening labor market. At the same time, recent GDP data suggest the economy has performed better than expected, although the prospect of fiscal tightening in the upcoming November 26 Autumn Budget could weigh on growth and reinforce disinflationary trends.
Markets will be closely watching the Bank’s updated economic projections and any signals in its forward guidance. While a 25 bps rate cut could be considered at the December meeting, policymakers are likely to emphasize the need for more data before committing to a shift in policy.
In Canada, the consensus for the employment change is -4.0K versus the prior 60.4K, while the unemployment rate is expected to edge higher from 7.1% to 7.2%. However, analysts at RBC anticipate a 10K job gain compared to the previous month.
Although labor market data have been volatile, there are growing signs of stabilization, suggesting that demand may be finding its footing. Online job postings are steady, layoffs remain limited, and much of the rise in unemployment reflects longer job searches, particularly among younger workers, RBC said.
Job losses have been concentrated in trade-exposed sectors such as manufacturing and transport, while broader employment conditions remain relatively resilient. Wage growth continues to cool, signaling a gradual easing in labor market tightness.
Analysts are also looking at hours worked as an indicator of early Q4 momentum. Despite a surprise GDP contraction in August, upward revisions to previous months and indications of September growth suggest GDP remains on track for roughly 0.5% quarterly expansion.
Attention will also turn to Tuesday’s federal budget, where any additional fiscal stimulus could help bolster growth prospects heading into 2025.
