Week Ahead Preview:
27th of October

Markets are gearing up for a busy week filled with key economic data, major central bank rate decisions, and quarterly earnings from U.S. technology giants.

This week, markets expect the Bank of Canada to cut interest rates by 25 basis points, from 2.50% to 2.25%, following recent signals from policymakers suggesting a willingness to continue easing if economic growth risks persist. Weak growth (which has slowed to 1.8% year-on-year and could decline further due to the impact of new U.S. tariffs) along with a rise in unemployment above 7.0%, are among the main reasons behind expectations for a rate cut. Meanwhile, inflation remains steady at 2.4%, providing the central bank room to ease policy further.

Markets also await the U.S. Federal Reserve’s rate decision, where a 25-basis point cut (from 4.25% to 4.00%) is widely anticipated. A softer labour market has intensified pressure from President Trump on the Fed to lower rates, with markets currently pricing in a 90% probability of another rate cut in December, which would mark the third cut this year. Investors will pay close attention to Chair Powell’s press conference for clarity on the Fed’s policy outlook and forward guidance.

Meanwhile, the European Central Bank is expected to keep rates unchanged at 2.0%. The ECB has already implemented several gradual cuts since mid-last year, prompting its president to remark that current rates are near the “neutral” level. However, political instability in France, alongside the emerging impact of U.S. tariffs on European goods, could prompt policymakers to consider another 25-basis point cut in December, particularly as inflation stands at 2.2%, close to the ECB’s 2.0% target, leaving room for further easing.

Additionally, U.S. Big Tech earnings will take centre stage, led by Apple. The company’s results will be closely watched, especially iPhone sales, which could exceed $44 billion amid strong demand as consumers rush to upgrade their devices before higher prices take effect next year due to tariffs. Other product lines, including Macs, iPads, and wearables, will attract investor’s attention. On the other hand, service revenues, such as subscriptions and App Store purchases, are expected to remain resilient as they are not directly affected by tariffs.

Economic Data Highlights (UAE time)

Monday, 27th of Oct

• USD- Durable goods orders (Sep)

Tuesday, 28th of Oct

• USD- Consumer Confidence (Oct)
• AUD- Inflation rates (Q3)

Wednesday, 29th of Oct

• Bank of Canada rate decision & press conference
• US Crude Oil Inventories
• Federal Reserve’s rate decision & press conference
• Microsoft & Alphabet (google) Q3 earnings report

Thursday, 30th of Oct

• Bank of Japan rate decision & press conference
• EUR- Employment change and unemployment rate (Germany- Oct)
• EUR- Gross Domestic Product (Q3)
• ECB rate decision & press conference
• Apple & Amazon Q3 earning report

Friday, 31st of Oct

• EUR- Inflation rates (Oct)
• USD- Inflation rates (PCE- Sep)