The economic landscape is set to become quieter in the run-up to Thanksgiving in the US and Christmas. At the time of going to press, the odds of the Federal Reserve making a quarter of a percentage point cut to interest rates is nailed on according to the CME’s Fedwatch tool.

Likewise, the Bank of England is expected to make a quarter of a percentage point cut to 4.75% when it meets on 7 November. Investors will be keen to hear BoE governor Andrew Bailey’s views on the future path for interest rates and how they may have been impacted by Labour’s Budget.

The OBR (Office for Budget Responsibility) believes UK inflation will be higher due to the policies announced and judging by the upward move to 10-year gilt yields since the budget, investors seem to be on the same page.

That said, longer-term bond yields have nudged up across Europe and the US over the past month, so it is difficult to untangle the wider market moves from the specific situation in the UK.

Investors and the Fed do not need to wait too long to see if US inflation expectations remain well-anchored with the closely watched University of Michigan inflation expectations survey for November out on 8 November.

The October reading was revised down to 2.7% from an earlier estimate of 2.9% according to the final figures. It matches the rate from the prior month and marks the lowest reading since December 2020. The five-year survey reading for October was confirmed at 3%, down from 3.1%.

The following week sees the release of US consumer price index data which could shed further light on the inflation headwinds facing the US consumer, which is the biggest driver of economic activity.

The index tracks price changes in a basket of consumer goods excluding volatile food and fuel. 

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