This Week: Volatility ahead with US elections and Fed rate decision in focus!

• US presidential elections on Nov 5th, potential market impact
   
• BOE rate decision on Nov 7th, 25 basis point cut expected
   
• Fed rate decision on Nov 7th, 25 basis point cut likely
   
• China's fiscal stimulus on Nov 8th, potential boost to markets

We’re headed into what’s set to be a monumental week for financial markets.

There’s the long-awaited US presidential elections, then key rate decisions by the Federal Reserve and the Bank of England, all while China’s leaders hunker down to potentially approve further economic support.
 

These major events should offer traders and investors a plethora of market opportunities across various assets, be it FX, stock indices, commodities, and cryptocurrencies.

Amidst the anticipated volatility, there are bound to be potential profits for traders who remain alert and ready to react.

Events Watchlist:
 

• Tuesday, November 5th: US Election Day

To be clear, results will only start filtering through from Nov. 6th onwards. Yet, markets have been pricing in the return of Donald Trump to the White House; hence the recent surge in the dollar, US stocks, and even Bitcoin.

However, if Kamala Harris wins the White House, along with the so-called “blue sweep” of Congress, then traders are likely to send Bitcoin plummeting, along with the other “Trump trade” assets listed above.

A Harris win is also set to boost Chinese and European stock indices, as well as the Chinese yuan, Mexican peso, and euro.

2024 Electoral map based on polls (as of Nov. 4, 2024, 01:00 UTC).

• Thursday, November 7th: Bank of England (BOE) rate decision

Markets predict a 78% chance that the BOE will cut by another 25-basis points (bps) at this meeting.

With the BOE then expected to leaves rates unchanged in December, GBPUSD traders will be more attentive to signals of the BOE’s rate-cutting pace in 2025, where one 25-bps cut is expected per quarter.

A slower-than-expected pace of rate cuts may push GBPUSD back above the psychologically-important 1.30 level.
 

• Thursday, November 7th: FOMC rate decision

Markets are forecasting a 99.8% chance that the Fed will cut interest rates by 25 basis points this month.

While Fed Chair Jerome Powell is likely to eschew any commentary on the incoming US president’s policies, markets will remain sensitive to the Fed’s plans for future cuts, with the odds of another 25-bps Fed rate cut before Christmas now standing at 81.5%.

Should the Fed solidify bets for a December rate cut and beyond, that could boost US stock indices, while weighing down the dollar, of course depending on the latest developments in the elections.
 

• Friday, November 8th: China’s Standing Committee of National People’s Congress announcement

Out of a week-long meeting which begins on the 4th, markets are eager to find out if China’s top legislative body will green light any further rounds of fiscal stimulus, for the world’s second-largest economy that’s still hobbling.

Meaningful fiscal stimulus announced on Friday may boost Chinese stock indices such as the CN50, CHINAH, and HK50.

However, gains could be muted, with markets aware that the next day’s US elections may usher in an administration that seeks to elevate US-China trade tensions.
 

Here’s a comprehensive list of other key economic data and events due this week:

Monday, November 4

• Japan public holiday
   
• CHINAH index: China’s Standing Committee of National People’s Congress meeting
   
• EU50 index: Eurozone PMIs (final)
   

Tuesday, November 5

• AUD: RBA rate decision
   
• CNH: China October composite and services PMIs
   
• Bitcoin: US presidential elections
   

Wednesday, November 6

• NZD: New Zealand 3Q unemployment
   
• JPY: BoJ meeting minutes
   
• TWN index: Taiwan October CPI
   
• GER40 index: Germany September factory orders; Eurozone September PPI
   

Thursday, November 7

• AU200 index: Australia September trade balance
   
• CN50 index: China October external trade data
   
• EU50 index: Eurozone September retail sales; Germany September industrial production and trade balance
   
• SEK: Sweden’s Riksbank policy rate decision
   
• NOK: Norway’s Norges Bank rate decision
   
• GBP: Bank of England rate decision
   
• US500 index: US weekly initial jobless claims
   
• USD index: FOMC rate decision
   

Friday, November 8

• TWN index: Taiwan October trade balance
   
• RUS2000 index: US November consumer sentiment
   
• CAD: Canada October unemployment