Three central bank policy decisions will be closely watched in the coming week, though not for any interest rate hikes but more for the tone of what is said.
The Bank of Japan is first up, on Tuesday 31 October, followed by the US Federal Reserve as we move into November and the Bank of England on Thursday.
The US non-farm payrolls report on Friday is the big economic data of the week, along with consumer confidence on Tuessday and Wednesday's construction spending, ISM manufacturing, crude oil inventories and auto sales.
Elsewhere on the UK economic calendar, are UK house price and BoE mortgage approvals on Monday, BRC retail prices on Tuesday, manufacturing PMIs on Wednesday and services PMIs on Friday.
Fed
For the meeting of the US central bank's Federal Open Markets Committee, markets are putting a 94% probability on no change in the Fed Funds rate at 5.5% on Wednesday, though one more hike is still factored into the system at some point.
Having hiked the rate from 0.25% to 5.50% and carried out quantitative tightening of $47.5 billion and then $95 billion a month, its balance sheet has been deflated by $1 trillion – or 12% – from the peak in the spring of 2022.
"A lot has happened since the September meeting, when the FOMC kept policy rates unchanged, and its expectation of one more hike in 2023," noted analysts at Rabobank, who expect this meeting to see the FOMC remain on hold, "while keeping the door open to a rate hike at the next meeting in December".
Chair Jerome Powell said the FOMC was prepared to proceed carefully with two-sided risks to the outlook, which UBS economists said meant they "assume that implies no rate hike at the November meeting".
While Powell sounded in the past week like "he was in no hurry to advance a view as to what comes next, either just stay restrictive through the end of the year or watch the data to see whether there might be a need to raise rates further", the UBS team also expect December to be a "live meeting", and a tougher call for the FOMC than current market pricing suggests.
The Fed’s first rate cut is currently expected in July 2024, analysts at AJ Bell noted.
BoE
The Bank of England is expected to stand pat on interest rates at 5.25% next week with economists expecting a prolonged pause backing the "higher for longer" mantra.
This follows a September meeting, where the bank's monetary policy committee voted by 5-4 to leave things as they were after 14 successive hikes.
Economists think the vote could be a more decisive pause next week...read more here.
BoJ
Japan's central bank remains the outlier among developed monetary authorities in that it has not raised interest rates.
While bond vigilantes have started to push back at the ultra-loose approach, the BoJ has just raised the hard cap on the 10-year Japanese government bond yield from 0.25% to 0.50% and then to 1.00% as its yield curve control policy came under pressure.
"If yields push past 1.00% the BoJ may intervene with more bond buying, but that would mean more Quantitative Easing and more money printing, which explains why the yen keeps sinking," said the AJ Bell team.
"The BoJ seems slightly stuck, as it does not really want to raise rates until wage growth becomes firmly embedded, even if inflation is finally running above its 2% target".
Governor Kazuo Ueda and his colleagues are expected to leave the headline interest rate unchanged at -0.1%, something that has not changed since early 2016.