What are the main events for today?

In the European session, the main event will be the ECB rate decision where the central bank is expected to cut by 25 bps. In the American session, we will get lots of US data including Industrial Production, NAHB Housing Index and the Philly Fed Manufacturing Index. The focus though will be on the US Retail Sales and Jobless Claims figures.

12:15 GMT/08:15 ET – ECB Rate Decision

The ECB is
expected to cut interest rates by 25 bps and bring the policy rate to 3.25%.
The central bank wasn’t looking for a back-to-back cut in October but following
the bleak PMIs at the end of September, the market rushed to price in such a
move which was then solidified following the benign Eurozone CPI and dovish
comments from ECB members. The market expects the ECB to deliver another
25 bps cut in December and four more in 2025.

12:30 GMT/08:30 ET – US Jobless Claims

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
after rising sustainably during the summer improved considerably lately.

Last week though,
the data surprised to the upside with both Initial and Continuing Claims
spiking to the cycle highs. The spike was attributed to distortions from
Hurricane Helene and the Boeing strike.

This week Initial
Claims are expected at 255K vs. 258K prior, while Continuing Claims are seen at
1870K vs. 1861K prior.

12:30 GMT/08:30 ET – US September Retail Sales

The US Retail
Sales M/M are expected at 0.3% vs. 0.1% prior, while the ex-Autos M/M measure
is seen at 0.2% vs. 0.1% prior. The focus will be on the Control Group figure
which is expected at 0.3% vs. 0.3% prior.

Consumer spending
has been stable which is something you would expect given the positive real
wage growth and resilient labour market. Retail sales data is generally a
market moving release but it’s volatile and most of the time the initial moves
are faded.

The Y/Y figure
smooths the noise but in recent recessions, retail sales haven’t been a leading
indicator, on the contrary, retail sales showed weakness when the recessions
were well underway. Therefore, the data shouldn’t influence the market’s
pricing much.

Central bank speakers:

• 15:00 GMT/11:00 ET – Fed’s Goolsbee (dove – non voter)

This article was written by Giuseppe Dellamotta at www.forexlive.com.