Week in Focus 26-30th October 2026: FOMC, BoC, RBNZ, ECB, BoJ Policy Decisions, US PCE

NOTE: On 25th October, UK clocks change. Therefore, the LN-NY time difference changes from 5hrs to 4hrs until Sunday, 1st November; NY clocks then change, reverting the time difference back to 5hrs.

• MON: US Treasury Buyback (Liquidity Support; 20Y-30Y), Chinese Fifth Plenum, Swedish PPI (Sep), German Ifo (Oct)
• TUE: Israeli legislative election for the Knesset, Chinese Industrial Profits (Sep), US Durable Goods (Sep), Richmond Fed Index (Oct), Dallas Fed Index (Oct)
• WED: Fed Policy Announcement (Oct), BoC Policy Announcement (Oct), RBNZ Policy Announcement (Oct), UK Autumn Budget, Australian CPI (Sep), German GfK Consumer Confidence (Nov), Italian Industrial Sales (Aug), PPI (Sep)
• THU: ECB Policy Announcement (Oct), EU-Canada summit (29-30 Oct), Swedish GDP (Q3/Sep), EZ Economic Sentiment (Oct), US GDP (Q3), PCE (Sep/Q3)
• FRI: BoJ Policy Announcement (Oct), CBRT Minutes (Oct), EU-Canada Summit (29-30 Oct), Japanese Unemployment Rate (Sep), Tokyo CPI (Oct), French GDP (Q3), French Flash CPI (Oct), Spanish Flash CPI (Oct), German GDP (Q3), German State/National CPI (Oct), EZ GDP (Q3), Italian Flash CPI (Oct), Canadian GDP (Aug)

CHINESE FIFTH PLENUM (MON): China's Fifth Plenum will take place from 26th-29th October, with discussions expected to focus largely on Party governance, anti-corruption and internal discipline ahead of the 21st Party Congress in 2027. On the economic front, attention will focus on any signals regarding support for domestic demand, local government debt and accelerated infrastructure spending, alongside China's push into strategic industries. Markets are unlikely to see any major stimulus announcements from the meeting itself, but the concluding communiqué will be closely watched for stronger language on supporting growth and consumption.

ISRAELI LEGISLATIVE ELECTION (TUE): Israelis will elect the 120-member Knesset, with neither PM Netanyahu's right-wing bloc nor the opposition led by former IDF chief Gadi Eisenkot expected to secure the 61 seats needed for a majority. Polls point to another fragmented parliament, making coalition arithmetic and the performance of smaller parties around the 3.25% electoral threshold crucial. Geopolitically, attention will focus on the implications for Israel's approach to Iran, the Palestinians and regional normalisation. A Netanyahu-led government would likely maintain the current confrontational security posture towards Iran and its proxies. An Eisenkot-led government would also be expected to maintain a firm stance on Iran but could favour closer coordination with the US and regional partners. However, with both main blocs currently short of a majority, an inconclusive outcome followed by potentially lengthy coalition negotiations remains a key risk.

FED POLICY ANNOUNCEMENT (WED): The Fed is expected to leave rates unchanged at between 3.75-4.00%. According to a poll by Reuters, 94 of 100 economists surveyed see a hold, in line with the 10% chance of a hike the CME implies. The pause would follow a unanimous 25bps rise in September, which Chair Warsh described as “removing a dose of accommodation.” Economic data has been resilient out of the US, with the Atlanta Fed tracking growth of 3.5% in Q3; however, hotter-than-expected inflation, which has exceeded the Fed’s 2% target for nearly six years amid higher energy costs linked to the war with Iran and new tariffs, has been a policy challenge for the Fed. Officials have recently signalled a preference for a slower, more deliberate path for rates. Ahead, however, all respondents expect a rate rise. In terms of the terminal rate expectations, around 60% see rates peaking at between 4.00-4.25%, though around 40% see at least two further increases. Analysts at Pimco said that the inflation landscape remains “elevated but not accelerating”, and expects a hold in October with the Fed keeping a clear tightening bias; it sees the Fed hiking in December by 25bps (when the Fed next updates its economic projections). The asset manager sees one or two more hikes ahead, which would effectively reverse last year’s cuts. Traders will also focus on the vote split; in July, Hammack, Logan and Kashkari all voted in favour of a 25bps rate rise, and some analysts suggest that these three may be inclined to again dissent.

BOC POLICY ANNOUNCEMENT (WED): Expectations for a hike have risen, with markets pricing an 80% chance of a 25bps hike next week amid escalating US-Iran conflict risks and concerns that elevated energy prices will drive persistent inflation. The BoC’s Q3 Business Outlook Survey showed 41% of firms expect inflation above 3% over the next two years (prev. 44%), while five-year inflation expectations rose to 3.91% (prev. 3.39%); September CPI was softer than expected, but RBC recently switched to forecasting a hike from a hold, and Governor Macklem warned that the longer elevated energy prices persist, the harder they will be to look through. Macquarie economist Doyle forecasts 125bps of rate hikes by end-2027.

RBNZ POLICY ANNOUNCEMENT (WED): The RBNZ is expected to raise the OCR by 25bps to 3.00%, although the decision remains uncertain following softer-than-expected Q3 CPI at 3.7% Y/Y (exp. 3.8%) and 0.7% Q/Q (exp. 0.8%). ANZ, BNZ and ASB expect a hike, citing inflation remaining above the RBNZ's 1-3% target, alongside a weaker NZD and higher energy prices adding to imported inflation pressures. Meanwhile, Westpac expects the RBNZ to hold rates at 2.75%. Markets price in a roughly 75-80% chance of a 25bps hike.

UK AUTUMN BUDGET (WED): Chancellor Healey and PM Burnham have done as much as possible to make this a boring budget. Pertinently, a CGT increase is seemingly off the table; and while this means the headroom figure will surely fall from the prior GBP 23.6bln figure to around GBP 15bln, the pro-business approach will, Healey hopes, help the market to accept this. The main hit will be to banks, which are expected to see a tax increase, raising between GBP 2-5bln, depending on the approach. Elsewhere, we await clarity on a number of points, namely: defence spending (Healey’s bias is well known), Rosebank (Jackdaw was approved), the Triple Lock (recent Burnham commentary), ‘Your First Home’ scheme, utility bill adjustments, and numerous other points. From the DMO, there is likely to be a further move away from the long-end, while the overall issuance plan is expected to increase by just over GBP 3bln.

AUSTRALIAN CPI (WED): Australian CPI is expected to rise in both the Q3 and September readings. The report will be a key determinant ahead of the RBA's 3rd November meeting, with money markets currently pricing in roughly equal chances of a hike or a hold. RBA's Hauser warned that the inflation outlook is "materially worse", adding that Q3 trimmed mean inflation is expected to exceed the Bank's forecast of 0.8% Q/Q. Consensus expects a 1% Q/Q rise, consistent with Hauser's prediction. As such, a hotter-than-expected report would likely bolster expectations of a November rate hike.

ECB POLICY ANNOUNCEMENT (THU): The ECB is not expected to hike in October; particularly, as the French fiscal/civil situation has spurred significant moves in the yields of a core EZ member, arguably reducing the space for further tightening. On the flip side, current data and economic developments point towards another hike, as the economy (ex-France) is holding up well enough to digest further tightening in order to get price pressures under control. Given this, the statement may be an even more non-committal affair than typical, and immediate focus will be on if the French situation is directly referenced. Thereafter, the press conference will be dominated by questions on OATs, TPI and whether the French moves alter the policy approach. Finally, speculation around President Lagarde’s imminent departure continues to grow, and will likely be a talking point.

US GDP (THU): The advance estimate of Q3 GDP is expected to show growth of 3.0% Q/Q SAAR (prev. 2.2% in Q2). However, going into the data, the Atlanta Fed’s GDPnow tracking estimate is modelling growth of 3.5%. Continuum Economics, which forecasts 2.8% headline growth, expects final sales to domestic buyers to rise 3.8%, matching Q2 levels, with AI-driven business investment up 9.6%. It says that trade and inventories are the key swing factors. Continuum sees inventory building adding 2.4ppts, more than offset by net exports subtracting 3.4ppts, as an 18.7% surge in imports driven by the AI boom coincides with a 6.4% fall in exports. On prices, it expects core PCE to rise 2.4% annualised in Q3 (prev. 3.3%).

US PCE (THU): The consensus expectation is for headline PCE to rise 0.5% M/M in September (prev. 0.3%), with the annual rate rising to 3.6% Y/Y (prev. 3.4%); the core measure is seen rising 0.3% M/M (prev. 0.2%), with the annual rate of core PCE seen rising to 3.1% Y/Y (prev. 3.0%). The September CPI and PPI reports point to upside risks to core PCE. Headline CPI rose 0.6% M/M, in line with expectations, but core rose 0.3% (exp. 0.2%) for the biggest rise since April. The PPI data was much hotter, with headline up 1.3% M/M (exp. 0.5%), and core up 0.7% (exp. 0.3%); airline fares jumped 4.0%, though the healthcare and insurance components that feed into PCE were soft. After the releases, analysts at Bank of America said they expect core PCE to rise 0.34% M/M, implying a rate of 3.1% Y/Y, and sees headline at 0.52% M/M (and 3.7% Y/Y); the bank noted however that its estimate was subject to more uncertainty than usual given recent methodology changes to legal services, computer software and accessories, and portfolio management and investment advice. In terms of the impact on policy, Pantheon Macroeconomics said the data could lift the three-month annualised rate of core PCE to around 3.0% from 2.0%. It argues that that is too high for the Fed to claim progress on inflation. Still, Pantheon expects the Fed to wait until December to hike, citing the soft labour market, the political friction of a pre-election move, and signals from policymakers like Williams, Jefferson and Waller who seem to favour a hold.

JAPANESE TOKYO CPI (THU): Tokyo CPI figures are widely seen as leading indicators for the more closely watched national readings. Inflation has trended higher throughout the year, with the latest national reading exceeding the BoJ's 2% target. As a reminder, headline Tokyo CPI Y/Y surged to 2.7% in September (prev. 1.9%), while core and super-core measures also jumped amid higher energy prices and imported inflation. The Tokyo report is due on the same day as the BoJ meeting, at which rates are expected to remain unchanged. However, a hawkish Tokyo CPI reading could bolster expectations of another rate hike in December.

BOJ POLICY ANNOUNCEMENT (FRI): The BoJ is expected to keep its Policy Rate unchanged at 1.25% following September's 25bps hike, with attention instead focused on the Bank's inflation assessment and updated Outlook Report. Recent source reports suggested the BoJ could upgrade its inflation forecasts and assess whether underlying inflation has reached its 2% target, after Governor Ueda said underlying inflation was already "quite close" to 2%. Any shift from describing inflation as "approaching the target" to "having reached" it would strengthen the case for further tightening, although policymakers are expected to favour a pause in October to assess the impact of September's move. Markets currently see December as the more likely timing for the next hike, with a more hawkish inflation assessment likely to reinforce expectations for another 25bps increase by year-end.

CHINESE ACTIVITY DATA (MON): Chinese activity metrics were broadly better than expected. GDP growth rose to 4.5% (exp. 4.4%, prev. 4.3%), Retail Sales growth accelerated to 1.1% (prev. 0.4%), while Industrial Production also edged higher. GDP growth was likely supported by robust exports, while domestic demand remained lacklustre. Retail Sales were likely buoyed by the Mid-Autumn Festival. Overall, the metrics were solid, albeit subject to caveats. As such, expectations for further stimulus measures may be pushed back for now. However, the overarching view remains that the impact of support measures announced in late September may prove temporary. Therefore, policymakers could announce another round of targeted policy support in the coming months, while leaving the reverse repo rate unchanged at 1.40% for the remainder of the year.

CHINESE LPR (TUE): The one- and five-year LPRs were maintained at 3.00% and 3.50%, respectively, as expected, marking the 17th consecutive month of unchanged rates. This followed a decision earlier this month to leave the seven-day reverse repo rate unchanged at 1.40%. As a reminder, China announced targeted policy support in late September aimed at boosting investment and housing amid weak sentiment. More recently, the PBoC Governor announced that the central bank was considering replacing the current seven-day rate with the overnight repurchase rate, a move that would effectively lower borrowing costs. Analysts at Pantheon Macroeconomics suggest this could represent a de facto cut of 15bps.

UK JOBS REPORT (TUE): August’s report was better than expected, featuring an unexpected decline in the unemployment rate. However, it is not all plain sailing for the market, with payrolled employees dipping and the largest vacancy fall since the start of 2026. Pertinently, the latter was driven by smaller businesses who are feeling the hit from increased labour costs. Overall, the series does not change the calculus from the BoE, which is set to kick off a tightening cycle in November. On the other hand, the series adds to calls from UK business for a non-damaging budget, as while the overall economy is holding up, the pressure on businesses continues to grow.

UK INFLATION (WED): A hawkish September headline at 3.5% Y/Y, some 40bps above the BoE’s forecast, likely cementing a November hike. In more detail, CPI was driven primarily and unsurprisingly by fuel prices, with derivatives of such prices also rising and contributing. The core components ticked higher, though are not at levels as concerning as the headline, with the exception of Services, which continues to climb ever closer to 4% and potentially points the direction for the headline. It remains to be seen if there will be any revision to the airfares component, which contributed an untypical amount for the period to the series. More broadly though, the path for inflation is higher into the winter period, and thus calls for a more pronounced tightening cycle than the circa two hikes currently being discussed as the base case may well grow.

BOK POLICY ANNOUNCEMENT (THU): The BoK unanimously kept its Base Rate unchanged at 3.00%, opting to assess the impact of its two previous hikes amid uncertainty surrounding the Middle East and policy in major economies. The Bank maintained a hawkish stance. The BoK now expects growth this year and next to be considerably stronger than its previous forecasts of 3.3% and 2.9%, respectively, while inflation next year is also expected to exceed earlier projections.

UK FLASH PMI (FRI): Better than expected across the board for October. PMIs showed the strongest growth rate since February. A point that is particularly pertinent as the economy remains somewhat bogged down in the pre-budget period, implying that the series could improve further in the months ahead. For the BoE, the robust economic backdrop alongside continued elevated price pressures means a hike in November is increasingly nailed on, and the odds of further tightening during 2027 are also increasing.

EZ FLASH PMI (FRI): The EZ series has the bloc on track for growth of 0.3% Q/Q, slightly slower than the implied rate from September. Overall, this has the ECB on track to hike again this year, and for the pace to potentially be higher than currently implied, given price pressures remain evident. Offsetting that is the dire performance of France, where the headline metrics all fell into contraction, and are likely to be revised lower once the recent bond rout and civil unrest is fully accounted for. Moody’s (due to update in the hours after this note is published) review of France could be the next inflection point, and may well see talk of TPI increase; though, ECB officials have thus far been clear the problems facing France cannot be solved via monetary policy.

UK RETAIL SALES (FRI): A softer than expected series, underscoring consumer hesitancy into the budget, looming further price increases (e.g. energy bills) and the ongoing Middle East driven uncertainty. For September, sales were hit by elevated fuel costs in the period and also the relatively warm weather, which may have seen typical Autumn activity postponed.

CANADIAN CPI (FRI): September inflation was softer than expected, with headline CPI at 3.1% Y/Y (exp. 3.2%), up from 3.0% previously. Ex-gasoline CPI rose 2.2% Y/Y, easing from 2.4% in August, helped by slower food price inflation (2.2% vs. 2.8%). The BoC’s average core inflation measure also eased to 2.0% from 2.2%. Despite the softer report, rate hike bets for next week remain elevated amid concerns that energy-driven inflation could broaden. The BoC’s Q3 Overall Business Outlook Survey also showed five-year inflation expectations rising to 3.91% (prev. 3.39% in Q2). With rates at 2.25% and thus at the lower-end of the estimated neutral range, policymakers are seen as having room to tighten further.

JAPANESE CPI (FRI): Headline CPI Y/Y rose to 2.1% (prev. 1.9%), moving above the BoJ's 2% target, while core CPI Y/Y also increased to 2.1% (prev. 1.7%). The rise in inflation was attributed to persistent energy costs and a weaker JPY, which has pushed up import costs. Overall, the figures support further BoJ tightening. While no change is expected at the October meeting, money markets price in around an 80% chance of a rate hike in December.

Clustered central bank weeks of this kind tend to trade less on the individual decisions than on the sequencing: the Fed sits first in the G10 line-up here, so the dollar leg of any surprise from the BoC, RBNZ, ECB or BoJ is conditioned by what the FOMC has already done to rate differentials. In past tightening-phase weeks with simultaneous decisions, the pattern has been that fully priced meetings (the ECB hold, the BoJ hold) matter only through language, while the live ones (BoC, RBNZ) carry the gap risk, since a hawkish consensus that is not unanimous has historically produced the sharper two-way moves. The distinction worth drawing is between meetings priced near certainty and those priced as coin flips: the former reprice the curve only on dissent counts and statement wording, the latter on the decision itself. With several banks framed around the same energy-driven inflation impulse, prior episodes of common supply shocks show policy divergence compressing and FX reacting to relative hawkishness rather than absolute levels. The calendar compounds this: the Fed decision lands before the PCE print, so the inflation data functions as a confirmation trade on whatever bias the statement leaves, a sequence that in comparable weeks has concentrated the week's volatility in the back half. Watch points are the vote splits flagged in the note, the French spread dynamic around the ECB press conference, and whether the BoJ's inflation language shifts from approaching to having reached target.