Wednesday in Washington DC, the Federal Open Market Committee (FOMC) is widely expected to cut its main policy rate for a second consecutive meeting, even as it makes decisions based on a limited flow of economic data.

Virtually all respondents in the latest economists’ poll forecast a 25bp cut at the end of the two-day meeting, taking the federal funds rate to a 3.75%–4.00% range. In September, the Fed resumed its easing cycle with a similar reduction. Markets are pricing in a further quarter-point cut in December.

“The Fed has indicated that it will cut rates by 25bp,” said Aditya Bhave, US economist at BofA Global Research. “We also expect the FOMC to announce an end to balance sheet runoff. The Fed will likely acknowledge the recent strength in economic activity, but the broader shift in focus toward the labour mandate probably won't change.”

(Continue Reading – LS)

Of the two North American central bank decisions on Wednesday, the Bank of Canada announcement is expected to be the more contentious.

The Governing Council is widely anticipated to lower its overnight rate by 25 basis points to 2.25%.

JP Morgan’s Bennett Parrish argued that the case for further easing rests largely on evidence that economic activity has continued to soften through the second half of the year. “Despite a surprising rebound in employment in the September labour force survey, job losses persisted in trade-exposed sectors and the unemployment rate held at a cycle-high 7.1%—prompting [BoC Governor Tiff] Macklem to characterise the labour market as ‘soft’,” he said.

(Continue Reading – LS)

FRANKFURT – Euro area rate-setters are off to the Italian tourist haven Florence for this month’s monetary policy decision, and one analyst said those who monitor the European Central Bank for a living can spend their Thursday focused on something else.

“If you’ve ever thought about skipping an ECB meeting, this is the one to sit out,” wrote ING’s Carsten Brzeski, who went on to cite various reasons why this week’s meeting is a non-event.

Atop that list was a lack of new data since last month’s rate decision, giving officials almost nothing to act upon. Policymakers are still looking at September’s inflation numbers. The annual headline rate of 2.2% is unlikely to warrant action as it remains close enough to the ECB target of 2.0% over the medium term. And the initial October number is not due until Friday. Additionally, third-quarter GDP data from the Eurozone is set for release just hours ahead of the ECB decision.

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Donald Trump said he expects to lower tariffs the US has imposed on Chinese goods over the fentanyl crisis and speak with China’s Xi Jinping about Nvidia Corp.’s flagship Blackwell artificial intelligence chip, as leaders of the world’s biggest economies seek to ease tensions in a meeting on Thursday.

“I expect to be lowering that because I believe they’re going to help us with the fentanyl situation,” Trump told reporters on Air Force One as he headed to South Korea on Wednesday, a day before he’s slated to meet with China’s president.

(Continue Reading – BBG)

GYEONGJU, South Korea, Oct 29 (Reuters) - Donald Trump and South Korean President Lee Jae Myung finalised details of their fraught trade deal at a summit in South Korea on Wednesday, and the U.S. president also sounded an optimistic note about a looming summit with China's Xi Jinping.

“We made our deal, pretty much finalized it," Trump said at a dinner with Lee and other regional leaders on the sidelines of an Asia Pacific forum.

(Continue Reading – RTRS)