What are the main events for today?

Focus on ECB and BoE Decisions

Today's main events include the monetary policy decisions from the Bank of England (BoE) and the European Central Bank (ECB). The BoE is widely expected to cut the rate by 25 bps, lowering it from 4.00% to 3.75%. There is a strong consensus for a 5-4 vote split, indicating dovish sentiments including Governor Bailey. This meeting will not feature a press conference, making the vote dynamics and guidance particularly critical.

ECB Policy Rate Stability

Meanwhile, the ECB is anticipated to maintain its policy rate at 2.00%. An upgrade to economic growth and inflation forecasts is expected, but no significant deviation from its recent data-dependent approach is foreseen.

Upcoming US CPI Report

In the American session, the latest US CPI report will be released, with a YoY expectation of 3.1%, up from 3.0%. Given the recent issues related to the October government shutdown, a mixed market reaction akin to the recent NFP report is likely. The strong 4.6% unemployment rate surpasses the Fed’s projection of 4.5% for the year-end, signaling a potential for earlier rate cuts. If today's CPI meets expectations or surprises to the downside, the market sentiment might shift dovishly. Conversely, an upside surprise could weigh on market sentiment in the short term but might not shift the larger sentiment significantly.