{"id":440345,"date":"2026-10-19T14:41:03","date_gmt":"2026-10-19T07:41:03","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/market-outlook-for-the-week-of-19th-23rd-october-440345\/"},"modified":"2026-10-19T14:41:03","modified_gmt":"2026-10-19T07:41:03","slug":"market-outlook-for-the-week-of-19th-23rd-october","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/market-outlook-for-the-week-of-19th-23rd-october-440345\/","title":{"rendered":"Market outlook for the week of 19th-23rd October"},"content":{"rendered":"
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This week will start off with traders paying attention to Canada’s inflation data which could provide hints on the BoC’s next policy move. <\/p>\n

On Tuesday, the U.K. will release its average earnings index 3m\/y, claimant count change, and the unemployment rate. In the U.S., the main releases will be the ADP weekly employment change, building permits, housing starts, and pending home sales m\/m. <\/p>\n

Wednesday will bring the U.K. inflation data, while Thursday the focus will shift to New Zealand’s inflation. The U.S. will also release unemployment claims. <\/p>\n

Finally, on Friday, Australia, the U.K., the Eurozone, and the U.S. will publish flash manufacturing and services PMIs. Japan will release its national core CPI y\/y, while the U.K. and Canada will publish retail sales data. In the U.S., the focus will be on the revised UoM consumer sentiment and revised UoM inflation expectations. <\/p>\n

In Canada, the consensus for CPI m\/m is 0.2% vs. the prior -0.1%. Median CPI y\/y is expected to remain unchanged at 2.0%, while trimmed CPI y\/y is forecast to hold at 1.9%. Common CPI y\/y is also expected to remain unchanged at 2.6%. <\/p>\n

This week\u2019s inflation data will be closely monitored for clues about the BoC\u2019s next monetary policy decision, which is due next week. The Bank\u2019s business outlook survey will also provide additional insight into economic conditions and inflation expectations. <\/p>\n

Traders will be watching for signs that persistently elevated energy prices might be driving broader inflationary pressures across the economy but so far there’s only limited evidence of spillage into the broader consumer prices. <\/p>\n

September headline inflation is expected to remain at 3.0% y\/y while core inflation could ease to 1.8% from 2.1%, according to analysts from RBC. Business confidence is expected to weaken further, while short-term inflation expectations could rise, even as longer-term expectations remain close to the 2% target. <\/p>\n

In terms of monetary policy, the BoC is expected to keep rates unchanged through the end of the year. However, if inflation continues to surprise to the upside, the chances for a rate hike in December could increase. Meanwhile, recent job losses and an unemployment rate holding near 6.5% highlight continued weakness in the labor market. <\/p>\n

The U.S. economic calendar will be relatively uneventful this week, with September housing starts and October flash PMIs unlikely to have a significant market impact. Fed officials will be silent during the blackout period ahead of the October 28 FOMC meeting, but markets currently price in a 30% chance of a rate hike. ING analysts believe such a move is more likely to occur at the December 9 meeting. <\/p>\n

In the U.K., the consensus for the average earnings index 3m\/y is 3.8% vs. the prior 3.9%, while the claimant count change is expected at 19.4K vs. the prior 27.8K. The unemployment rate is expected to remain 4.9%. <\/p>\n

The labor market is showing early signs of stabilization, particularly in consumer services, following a prolonged period of weakness. However, a meaningful recovery is not expected anytime soon, with this week\u2019s data likely to confirm that wage growth pressures remain subdued. <\/p>\n

For inflation, the consensus for CPI y\/y is 3.4% vs. the prior 3.1%, while core CPI y\/y is expected at 2.8% vs. the prior 2.6%. Some analysts forecast headline inflation to rise to 3.5% and move toward 4.0% by the end of the year, although the higher energy costs have yet to generate broad price pressures. <\/p>\n

The threat of rising inflation is expected to prompt BoE rate hikes in November and potentially February. However, ING analysts think markets are overestimating both how far rates will rise and how long they will remain elevated, with cuts expected by the end of 2027. <\/p>\n

In New Zealand the consensus for the CPI q\/q is 0.8% vs. 1.5% prior. Annual inflation is expected to ease to 3.7% from 4.1% after Q3, according to Westpac, below the RBNZ’s last published forecast of 3.9%. <\/p>\n

The fuel cost moderation was offset by rising council rates, construction costs and food prices, so the underlying inflation is expected to remain firm, with some measures reaching the top of the RBNZ\u2019s target band. <\/p>\n

In Japan, the consensus is for the national core CPI y\/y to rise from 1.7% to 2.1%. This week\u2019s data is expected to reflect renewed inflationary pressure, with headline inflation also expected to rise and “core-core” inflation likely to increase to 2.8%. <\/p>\n

Tokyo\u2019s latest figures support this outlook, with inflation driven by higher energy costs, the lagged effects of the yen weakness and strong AI-related demand impacting durable goods prices. A stronger national reading would reinforce expectations for further BoJ tightening. <\/p>\n

With the policy rate at 1.25%, another 25 bps hike is expected in December, taking the rate to 1.50%, followed by further increases in 2027, Wells Fargo analysts said. <\/p>\n

Eurozone business activity is expected to lose some momentum in October after stronger-than-expected PMI readings over the summer. Rising energy prices and renewed concerns over France\u2019s budget situation could weigh on both manufacturing and services, though the composite index is still expected to remain above the 50-point mark, ING said.<\/p>\n

This article was written by Gina Constantin at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

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