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Week Ahead: All Eyes on BOC Rate Statement and ECB Rate Statement

October 23, 2023

Several key events are expected to influence the financial markets this week, including interest rate decisions from the Bank of Canada (BOC) and the European Central Bank (ECB). In light of this, we recommend traders to exercise caution in their trading preparations, keeping in mind the potential for increased market volatility.

Here are some key highlights to keep an eye on during the week:

UK Claimant Count Change (24 October 2023) 

The number of people claiming unemployment benefits in the UK increased by 900 in August 2023. 

Updated figures will be released on 24 October, with analysts expecting an additional increase of 2,300. 

Flash Manufacturing PMI for Germany, the UK, and the US (24 October 2023)

Germany’s manufacturing Purchasing Managers’ Index (PMI) climbed from 39.1 in August 2023 to 39.6 in September 2023. Meanwhile, the UK’s manufacturing PMI for the same period increased from 43 to 44.3. Finally, the US’ manufacturing PMI for the same period rose from 47.9 to 49.8.

Updated figures will be released on 24 October, with analysts expecting manufacturing PMIs of 40.1 for Germany, 44.7 for the UK, and 49.5 for the US.

Flash Services PMI for Germany, the UK, and the US (24 October 2023)  

Germany’s services PMI rose from 47.3 in August 2023 to 50.3 in September 2023. Conversely, the UK’s services PMI declined from 49.5 to 49.3 during this period, while the US’ services PMI also fell from 50.5 to 50.1 during the same period.

Analysts’ forecasted services PMIs for October 2023 are as follows: 50.1 for Germany, 49.4 for the UK, and 49.9 for the US. 

Australia Consumer Price Index (25 October 2023)

The Consumer Price Index (CPI) in Australia increased by 5.2% in August 2023, up from the 4.9% rise recorded in July 2023. 

Analysts are expecting a growth rate of 5.4% for September 2023, with updated figures to be released on 25 October.

Bank of Canada Rate Statement (25 October 2023)

The BOC maintained its overnight rate target at 5% during its September 2023 meeting, marking another pause in its tightening cycle. The bank indicated that future rate decisions would hinge on the most recent economic indicators.

The next rate statement is set to be released on 25 October, with analysts expecting rates to remain at 5%.

European Central Bank Main Refinancing Rate (26 October 2023) 

During its September 2023 meeting, the ECB increased its main refinancing rate by 25 bps to 4.5%. The decision to hike the interest rate was closely contested among ECB members, with the meeting minutes revealing that they were divided by tactical considerations. 

Analysts expect the central bank to maintain a rate of 4.5% following its upcoming meeting on 26 October.

US Advance GDP (26 October 2023) 

The US economy expanded at an annualised rate of 2.1% in Q2 2023, down slightly from the 2.2% growth in Q1 2023.

Data for Q3 2023 is scheduled for release on 26 October, with analysts projecting a growth rate of 4.3%.

US Core PCE Price Index (27 October 2023) 

The Core Personal Consumption Expenditure (PCE) Price Index for the US, excluding food and energy, rose by 0.1% month-over-month in August 2023. This was the smallest increase since November 2020.

Data for September 2023 is scheduled for release on 27 October, with analysts expecting a growth of 0.3%.

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