Next week's highlight will likely be Friday's global releases of the purchasing managers' indices (PMI) for September.
CIO is looking for confirmation of the solid global economic growth trends seen so far this year. CIO will also watch closely Canadian inflation data on Friday. CIO has an overweight position in the CAD against an underweight in the AUD in its CIO House View. A rebound in the inflation rate could further increase chances of another rate hike by the Bank of Canada this year. The BoC has already raised its policy rate twice, which has benefited CIO's AUDCAD position.
Among developed markets, Japan and Norway will announce policy rate decisions next week. CIO does not expect any major surprises. The Bank of Japan may further reduce its pace of monthly asset purchases should its program reach its limits next year, since Japan's economy has been growing solidly of late. In Norway, monetary policy has remained unchanged this year, and the mixed
signals from the economy will likely force a continuation of that policy.
Several emerging market countries will also have central bank meetings in the coming week, including Hungary, South Africa, Taiwan, the Philippines, and Indonesia. The market currently expects only South Africa to cut rates.