In the European session, we get the flash PMIs for the Eurozone and the UK. Barring big deviations, the data shouldn’t change anything for the respective central banks at the moment. The ECB is comfortably on hold until further notice, while the BoE is now more focused on inflation (which surprised to the downside recently).

In the American session, we have the US CPI report and the US flash PMIs. The US CPI Y/Y is expected at 3.1% vs 2.9% prior, while the M/M figure is seen at 0.4% vs 0.4% prior. The Core CPI Y/Y is expected at 3.1% vs 3.1% prior, while the M/M reading is seen at 0.3% vs 0.3% prior.

The data won’t change anything for the upcoming FOMC meeting in October as the Fed will cut by 25 bps no matter what. Nevertheless, it could influence the market pricing further down the curve. In fact, right now the market is pricing 119 bps of easing by the end of 2026, which is much more dovish than the Fed’s projected 75 bps. Therefore, a hot report might trigger a hawkish repricing, while soft data should reinforce the dovish market’s pricing.

The pricing got so dovish in response to the recent risk-off wave triggered by Trump’s threat of imposing massive tarrifs on China on November 1 in case they didn’t reach a deal. This risk has eased substantially after de-escalatory comments from Trump and US officials. We are now just waiting for US-China trade talks over the weekend and Trump-Xi meeting on October 30.

After the CPI, we will also get the S&P Global US Flash PMI report. The Manufacturing PMI is expected at 52.0 vs 52.0 prior, while the Services PMI is seen at 53.5 vs 54.2 prior. The focus will likely be on the employment and inflation data in the report.