A busy week lies ahead for forex traders, with several key economic events scheduled, although Monday starts quietly with no major releases.

Tuesday’s focus will be on the Reserve Bank of Australia’s (RBA) monetary policy announcement, alongside U.S. data on ADP employment changes and JOLTS job openings. BoJ Governor Ueda will participate in a discussion at the Financial Times Global Boardroom Conference in London, covering inflation, interest rates, financial stability, and the yen’s external value.

On Wednesday, the Bank of Canada (BoC) will announce its monetary policy decision, followed by the highly anticipated U.S. Federal Open Market Committee (FOMC) meeting.

Thursday sees Australia releasing employment change and unemployment figures, Switzerland unveiling its Swiss National Bank (SNB) policy decision, and the U.S. publishing its weekly unemployment claims.

The week concludes on Friday with the United Kingdom’s month-on-month GDP figures.

At this week’s meeting, the RBA is widely expected to keep interest rates on hold. Recent data, including the Q3 National Accounts, suggests the Australian economy is gaining momentum. Despite monthly consumer price index (CPI) figures exceeding expectations, analysts at Westpac note that price rises were mostly in sectors influenced by government policy rather than pure market forces, indicating ongoing structural inflation drivers.

The RBA will continue to monitor incoming data before deciding future policy moves. Inflationary pressures are expected to moderate in 2024, paving the way for potentially two 25-basis-point rate cuts in the next year.

The U.S. Labour Market: Attention this week will also centre on the JOLTS job openings data for September and October, which will provide insights into a softening U.S. labour market. The consensus for October job openings is 7.14 million.

Markets will watch key metrics such as the job-openings-to-unemployment ratio and the quit rate. Wells Fargo analysts highlight that this ratio fell below 1.0 in August, signalling a growing imbalance between labour demand and supply. The quit rate has remained steady at 1.9% throughout the year, but a significant drop could indicate increased worker caution amid a weaker labour market.

The BoC is expected to maintain its current rate setting after consecutive cuts in September and October. Since those reductions, Canadian economic data has improved, with GDP surpassing expectations and labour market recovery evident. Employment rose by 54,000 in November, and the unemployment rate dropped from 7.1% to 6.5%. The recent rate cuts have also supported consumer spending.

However, inflation remains above the BoC’s 2% target, and upward pressure could persist into next year due to consumer and government expenditure. Markets currently do not anticipate further rate cuts in 2026.

At the FOMC meeting, a 25-basis-point rate cut is likely, though the decision could be close given recent divisions within the Federal Reserve. Inflation in the U.S. remains a concern, especially with tariff-related price rises, but the softer labour market data increases the likelihood of a rate cut—backed by several influential Fed policymakers.

Updated economic forecasts from the Fed will also be released. Some analysts expect these to show only one further rate cut in 2026, while current market pricing anticipates two to three cuts.

Markets are also attentive to the possibility of a new Fed chair nomination in 2026. Should a candidate like Kevin Hassett be appointed, investor focus may shift from concerns about the Fed delaying rate cuts to fears of overly aggressive easing, adding uncertainty to early-year monetary policy outlooks.

In Australia, employment change is expected to slow to 20,300, down from 42,200 previously, with the unemployment rate forecast to rise slightly from 4.3% to 4.4%.

Westpac analysts point out that although October’s employment exceeded expectations, the three-month trend in job creation has slowed to an annualised rate of about 1.5%, roughly half a percentage point weaker than earlier in the year.

The Q3 Labour Account reveals deeper shifts: industries that expanded rapidly during the care-sector hiring boom are normalising, while market-driven sectors are gradually picking up. Labour demand has strengthened, labour supply remains steady, and the participation rate is unchanged at 67.0%. The unemployment rate fell from 4.5% to 4.3% last month but shows signs of a gradual increase.

Much of the month-to-month volatility comes from younger workers, whose unemployment rate fluctuations tend to precede broader labour market trends.

The SNB is expected to hold rates steady this week. Inflation in Switzerland has decreased more than expected but is still projected to hover around zero for some time. Although a rate cut of 25 basis points to -0.25% could occur in March next year, returning to negative interest rates would require the Bank to exhaust other options and meet a higher threshold.

In the UK, manufacturing output fell in September following a major cyberattack that halted Jaguar Land Rover production for several weeks; this issue has since been resolved. October GDP is expected to show a modest monthly improvement of 0.1%, up from -0.1% in September.

Original Source: Gina Constantin of investinglive.com