Foreign exchange markets face a packed week of events that could shift interest-rate expectations. The Reserve Bank of Australia and Bank of England are expected to raise rates, US midterm elections could add uncertainty over policy, and Friday’s US and Canadian jobs reports will offer fresh signals on labour-market conditions. Traders will weigh growth, inflation and employment data for clues on how much further central banks may tighten.
November 2: RBA decision and US factory data
The week opens with the US ISM manufacturing purchasing managers’ index. The reading is expected at 54.7, up from 54.5. A figure above 50 indicates expansion; markets will also examine prices paid, new orders and employment for signs of inflation pressure and resilience in manufacturing.
The RBA will announce its cash-rate decision and monetary policy statement before holding a press conference. Markets expect a 25-basis-point increase, taking the rate from 4.60% to 4.85%. The Australian dollar’s reaction will depend not just on the move itself, but on the bank’s guidance: whether it leaves the door open to further tightening or suggests rates are close to restrictive enough to cool demand.
November 3: US midterms put policy in focus
Tuesday’s US midterm elections will determine control of the House and Senate, shaping President Donald Trump’s ability to advance his legislative agenda in the second half of his term. Key Senate contests include Georgia, North Carolina, Maine and Michigan. The races involving Georgia’s Jon Ossoff and Maine’s Susan Collins, along with open seats in North Carolina and Michigan, are among those drawing attention. New Hampshire’s open seat is also being watched.
Control of the House could hinge on a handful of closely contested districts, particularly in California, New York, Pennsylvania, Michigan and Arizona. Suburban voters and districts where the presidential race was close may prove decisive.
Markets will be assessing what the results could mean for taxes, spending, regulation and Treasury financing. Unified Republican control would give the administration more room to pursue tax, spending and regulatory legislation. If Democrats control either chamber, divided government would make budgets and major bills more dependent on negotiations, with energy, healthcare and corporate tax policy also in focus.
Based on the current seat count, Democrats would need a net gain of three House seats and four Senate seats to control both chambers. Republicans hold a 220-215 House advantage; a Democratic net gain of three would produce a narrow 218-217 majority. In the Senate, Republicans have 53 seats to Democrats’ 47. A Democratic net gain of four would create a 51-49 majority. A gain of three would leave the chamber tied at 50-50, with Vice President JD Vance able to break ties and keep Republicans in control. Net gains account for seats won minus seats lost.
Other releases and events include Swiss monthly CPI, expected to be unchanged at 0.0%, and US JOLTS job openings, forecast at 7.11 million versus 7.08 million previously. Bank of Canada Governor Tiff Macklem is due to speak. New Zealand’s quarterly employment is expected to rise 0.4%, down from 0.5%, while the unemployment rate is forecast to fall from 5.6% to 5.5%. Wage and participation figures may help clarify whether slower job growth alongside a lower unemployment rate points to a strengthening labour market.
November 4: Eurozone inflation and US services
Eurozone preliminary core CPI is expected to hold at 2.5% year over year, while headline inflation is forecast to rise to 4.0% from 3.8%. If headline inflation increases while core inflation is unchanged, the European Central Bank will face a mixed set of signals in its policy assessment.
The US ISM services index is forecast to remain at 54.9, keeping the sector in expansion territory. The details will shape the market read: rising prices paid alongside weaker employment would send a different signal from broad strength across new orders, business activity and hiring.
November 5: Bank of England decision and Canada’s budget
The Bank of England will publish its rate decision, Monetary Policy Report and policy summary on Thursday. Markets expect a 25-basis-point increase in Bank Rate, from 3.75% to 4.00%. The Monetary Policy Committee vote is forecast at seven for a hike, none for no change and two for a cut—a marked shift from the previous 3-0-6 split.
Sterling traders will look for signs in the inflation forecasts that further tightening may be needed, as well as comments from Governor Andrew Bailey after the decision. Swiss National Bank Chairman Martin Schlegel is also scheduled to speak. US initial jobless claims are expected at 197,000, up from 194,000. Macklem and European Central Bank President Christine Lagarde are also due to speak.
Canada will release its annual budget in the afternoon. Spending plans, borrowing needs and assumptions for economic growth could shape expectations for the Canadian dollar and provide fiscal-policy context ahead of Friday’s employment report.
November 6: US and Canadian jobs reports land together
The US and Canadian employment reports are both scheduled for 8:30 a.m. Eastern time on Friday, making them the week’s most concentrated data test. US nonfarm payrolls are expected to rise by 63,000, up from 29,000. The unemployment rate is forecast to hold at 4.2%, while average hourly earnings are expected to increase 0.3% month over month, accelerating from 0.1%. Weak hiring alongside stronger wage growth would put both slowing growth and persistent inflation pressures in focus. Revisions to payrolls will also matter.
Canadian employment is forecast to increase by 14,500, following a decline of 68,300 in the previous report, while the unemployment rate is expected to remain at 6.5%. The Ivey PMI is forecast at 57.7, down from 58.2. The preliminary University of Michigan consumer sentiment index is expected at 47.8, compared with 48.0 previously; the prior inflation-expectations reading was 4.7%, with no forecast listed for the new release. Bank of Japan Governor Kazuo Ueda is scheduled to speak, and New Zealand’s parliamentary election is also on the calendar.
With the US and Canadian reports due at the same time, USD/CAD may initially respond to the relative strength of the two sets of data. US hiring and wages, together with the extent of Canada’s employment recovery, will feed into assessments of economic and interest-rate prospects in both countries. The week’s crowded calendar leaves markets weighing whether currency moves after each release hold once the initial reaction has passed.