As of October 3, 2024, European and global markets are anticipating significant economic shifts, with central banks likely to implement rate cuts in response to moderating activity levels. Investors are increasingly betting that the European Central Bank (ECB) will reduce rates by 25 basis points at its upcoming meetings in October and December, following comments from ECB board member Isabel Schnabel suggesting inflation is under control.
In the UK, service sector activity continues to expand, while Germany and other parts of Europe are expected to report contractions in their composite PMIs for September. In the U.S., jobless claims and the ISM services survey are on the agenda, but all eyes are on Friday's payroll figures.
In New Zealand, economists predict a 50 basis point cut in rates at the central bank's meetings in October and November. Meanwhile, Singapore's manufacturing PMI remains in expansion, but analysts warn of potential supply chain challenges due to rising input prices.
Asian markets experienced a mixed day; the MSCI ex-Japan index fell by 1.4%, driven by a 3.5% drop in Hong Kong's Hang Seng index after a recent surge. Japanese stocks rallied by 2.3% as new Prime Minister Shigeru Ishiba indicated a preference for maintaining loose monetary policy, which has led to a decline in the yen to its lowest value in a month.
Key economic indicators to watch include the HCOB Eurozone Services PMI, the U.K. S&P Global Services PMI, and U.S. jobless claims, alongside remarks from Federal Reserve officials.