Week in Focus 4-9th October 2026: FOMC Minutes, US ISM Services PMI, OPEC+, Canadian Jobs and ECB Minutes

SUN: Brazil Election, OPEC+ MON: Global Final PMIs (Sep), EZ PPI (Aug), US ISM Services (Sep) TUE: EIA STEO, German Factory Orders (Aug), French Industrial Production (Aug), EZ Construction PMI (Sep), EZ Retail Sales (Aug), US Balance of Trade (Aug) WED: US Treasury Buyback (Liquidity Support; 20Y-30Y), FOMC Minutes (Sep), NBP Policy Announcement (Oct), German Industrial Production (Aug), Swedish CPIF (Sep), French Balance of Trade (Aug) THU: UK Holborn and St Pancras parliamentary by-election, ECB Minutes (Sep), Banxico Minutes (Sep), German Balance of Trade (Aug) FRI: S&P Credit Review on UK, Norwegian CPI (Sep), Swedish GDP (Aug), Canadian Jobs Report (Sep), US UoM Survey (Oct) WEEK AHEAD BRAZIL ELECTION (SUN): The first round takes place on Sunday 4th October, with 13 candidates. A candidate needs more than 50% of valid votes to win outright. If no one does, the top two go to a runoff on 25th October. Datafolha has President Lula on 42%, and Senator Flavio Bolsonaro on 38% in the first round, so a runoff is certainly possible. The runoff polls are currently a technical tie; Datafolha has Lula ahead 48-45, though has a +/- 2 point margin for error; Atlas has Bolsonaro ahead 47.7-47; around 5% of voters are currently undecided, the pollsters suggest. In terms of policies, the left-wing Lula has expanded welfare, offered household debt relief and cracked down on online betting; he favours independence from the US and closer trade ties with China. The right-wing Bolsonaro is the son of former President Jair Bolsonaro; he has pledged tougher action on crime, including five El Salvador-style supermax prisons, and closer ties with Washington. US President Trump imposed tariffs on Brazilian goods, which Lula described as election interference, while the Bolsonaro family cultivated ties with Washington; Trump called Jair Bolsonaro’s coup conviction a “witch hunt”. If Lula wins, it could mean continued trade friction, while a Bolsonaro victory could ease tensions with the US. Some analysts have therefore suggested that Bolsonaro is generally seen as the more market-friendly option because of concerns over Lula’s fiscal spending, and potential for warmer ties with the US. However, Bolsonaro is under a money-laundering investigation; the Banco Master collapse triggered investigations into alleged fraud, money laundering and political links involving former chief Daniel Vorcaro, Alexandre de Moraes and Flavio Bolsonaro. Lula’s son, Fabio Luis Lula da Silva, is separately under investigation for alleged influence peddling. Analysts at the political and corporate intelligence firm Sabio have warned that further revelations could disrupt the election race. OPEC+ MEETING (SUN): OPEC+ is expected to keep November production targets unchanged after completing the rollback of its 1.65mln BPD voluntary cuts in September and pausing further increases in October. The JMMC will assess market conditions and compliance before the seven core producers meet to discuss output policy. Meanwhile, the production capacity review needed to determine 2027 baselines has been delayed until mid-November as some members have yet to submit data, leaving future quota discussions unresolved, including Iraq's push for a higher baseline. Actual output also remains well below pre-conflict levels amid continued shipping and infrastructure disruptions around the Strait of Hormuz. US ISM SERVICES (MON): As a proxy, S&P Global’s flash services PMI business activity index rose to 58.7 in September (prev. 56.5 in August), a 59-month high, helping lift the composite output index to 58.4 (from 56.0), the fastest expansion since July 2021. Under the bonnet, services drove the overall acceleration, with activity rising at the steepest pace in over five years. New business growth also gathered pace, reaching its fastest since March 2022, though demand came mainly from the domestic market, as services exports rose only modestly. Backlogs of work in services rose at an increased rate, contributing to the sharpest economy-wide rise in outstanding orders since May 2022, which S&P said points to stretched operating capacity. Supply chains may also lend support to the ISM’s supplier deliveries component; its economist described bottlenecks as among the most severe in the survey’s near-two-decade history, ex the pandemic. On jobs, services payrolls rose at the fastest rate since June 2022 as firms hired to meet demand, though S&P noted that companies were having more trouble finding suitable staff. On prices, services input cost inflation hit its highest since November 2022, blamed mainly on higher fuel and transport costs, with wage pressures also picking up. Selling price inflation also rose, but competition in the service sector held it back. S&P said service providers’ sentiment remained well below trend amid cost-of-living concerns, higher borrowing costs and political uncertainty, in contrast to more upbeat manufacturers. US TREASURY BUYBACK 20Y-30Y ANNOUNCEMENT (WED): The Treasury will announce the preliminary size of its 20-30yr buyback on Tuesday, with the size confirmed the following day, a few hours ahead of the actual operation. Since the enhanced buyback operations began, the US Treasury has been buying a maximum of USD 6bln per operation. Participants will therefore be watching to see whether the maximum is increased from USD 6bln given the elevated yield environment. Meanwhile, the previous 20-30yr operation saw the Treasury accept USD 4.08bln of USD 10.47bln in offers, below the USD 6bln maximum, likely reflecting that Treasury did not deem enough of the submitted offers economically attractive to warrant buying up to the cap. FOMC MINUTES (WED): The upcoming minutes will provide an account of the September meeting, where the Fed unanimously opted to hike rates by 25bps. The statement saw only minor changes, noting the hike would help return inflation to target in a timelier manner, while reiterating the Fed's commitment to price stability. The Fed maintained that inflation remains elevated, although it dropped previous language attributing this partly to supply shocks. The Fed also released its updated Summary of Economic Projections, where the median participant (excluding Chair Warsh, who did not submit forecasts) pencilled in one more rate hike in 2026, followed by rates being on hold through 2027. For 2026, four participants pencilled in two more hikes, 12 saw one more and two saw no further hikes. Views for 2027 were more divided: eight participants saw at least two further hikes from current levels by the end of 2027, six saw one further hike and four pencilled in rate cuts from current levels. Given the Fed's lack of forward guidance, the minutes may provide limited insight into the precise path for rates, although any clues on the inflation and labour-market outlook will be of note. It was clear from the September meeting that the Fed remained focused on the inflation side of its mandate, with the labour market viewed as close to full employment. The latest SEPs showed 17 participants judged risks to unemployment as broadly balanced, with one seeing risks weighted to the downside and none to the upside. For core PCE inflation, 15 saw risks weighted to the upside and three viewed them as broadly balanced. Commentary since the FOMC has seen key officials, including FOMC Vice Chair Williams and Fed Vice Chair Jefferson, suggest there is no need to rush further rate hikes, although Williams still sees one more hike this year as reasonable, while Bowman sees no further hikes. This, coupled with a softer PCE report, has seen markets substantially reduce bets on an October hike. However, the PCE report was released after the September meeting and therefore will not be reflected in the minutes. As such, attention will be on whether other officials were already expressing similar caution at the meeting, or whether the more patient tone represents a development following the subsequent data. Meanwhile, the September jobs report was very soft, with the unemployment rate ticking up to 4.2% from 4.1%, while headline payrolls rose by just 29k, well below the 90k forecast. Therefore, there have been significant developments on both the inflation and labour-market sides of the mandate since the September meeting, which have shifted the policy backdrop in a more dovish direction and may leave the minutes looking somewhat stale. RBI (WED): The RBI will hold its latest three-day policy meeting next week, where the central bank is expected to hike rates, with a major newswire poll showing 35 of 61 economists calling for a 25bps increase in the Repurchase Rate to 5.50% from the current 5.25%. As a reminder, the RBI kept rates unchanged at its last meeting in August, as expected, with the decision unanimous and the MPC maintaining its neutral policy stance. RBI Governor Malhotra said during the policy address that the global economic environment had become increasingly unstable, with crude oil prices, currencies and financial markets remaining volatile. He also said headline inflation had edged above the target but added that supply-side pressures from the West Asia conflict had eased somewhat. Malhotra said there was a need for greater clarity on inflation before taking policy action, while the MPC underscored that it would maintain a close vigil and remain resolute in aligning inflation with the target. Since then, Malhotra has said there are signs that previously moderate inflation is beginning to normalise and reiterated an inclination to wait for greater certainty over the inflation trajectory before adjusting policy rates, suggesting the prospect of the central bank standing pat cannot be ruled out. However, inflation has continued to edge above the central bank's 4% target, with CPI Y/Y in August at 4.82% vs. Exp. 4.8% (Prev. 4.45%), which favours a hike. SWEDISH CPIF (WED): September CPI is expected to rise, with headline CPIF seen jumping to 1.6% Y/Y (prev. 0.7%), above the Riksbank's own forecast of 1.5%, while core CPIF Y/Y is expected to edge up to 0.7% (prev. 0.5%), in line with the Bank's 0.7% forecast. As a reminder, the Riksbank leaned hawkishly at its September meeting but noted that it expects hikes to begin this year. As such, a hot inflation report, or even an in-line reading, could convince policymakers to tighten this year; analysts at SEB pencil in a November hike. ECB MINUTES (THU): As expected, the ECB hiked by 25bps in September, a decision that was unanimous. Pertinently, the release and press conference made clear that the decision would have taken place under all three of the additional scenarios provided. The release did not significantly shift the dial in terms of market pricing, with developments since underscoring the narrative that further tightening is likely. From the minutes we look for insight around whether a larger magnitude hike and/or a hold was even part of the discussion, and what the view was around October at that point. To remind, sources just after the meeting suggested that October was already a live meeting. UK HOLBORN & St PANCRAS PARLIAMENTARY BY-ELECTION (THU): Triggered by former UK PM Starmer stepping down as PM and then from Parliament. The by-election has drawn focus as a litmus-test of PM Burnham following the Labour annual conference (see review for more), and is one of the near-term hurdles for Burnham that may inform the prospect of an early election. Polling for the seat is around 39% Labour, 32% Greens, 10% Conservative, and 9% Reform. If correct, this would be a significant swing to the Green party, though it would mean that Green Party leader Polanski remains outside of the House of Commons. NORWEGIAN CPI (FRI): September CPI is expected to move higher, with Y/Y inflation seen rising to 3.7% (prev. 3.3%), above Norges Bank's target of 3.5%. The closely watched CPI-ATE measure is expected to edge up to 3.1% (prev. 3.0%), 0.2% above the Bank's own target. In September, the Bank raised rates by 25bps, with some analysts believing it has now reached terminal. Nonetheless, the accompanying statement suggested that "it will likely be necessary to keep the policy rate elevated for a time". SEB believes the Bank has reached its policy peak, though it sees risks skewed to the upside. CANADIAN JOBS REPORT (FRI): Employment growth remains volatile, as shown by August's 41.7k decline (exp. +15k) following three consecutive months of growth. The decline reflected losses of 35.9k in full-time employment and 5.8k in part-time employment. The unemployment rate stood at 6.4%, despite a decline in the participation rate. Oxford Economics expects the economy to continue struggling to create jobs in the near term as mounting headwinds from new US-Canada tariffs, greater uncertainty from an escalating trade war, the ongoing Iran conflict and a shrinking population weigh on hiring. WEEK IN REVIEW BOJ MINUTES (MON): BoJ Minutes from the July meeting stated that members agreed financial conditions are accommodative, while many noted that firms are steadily passing on rising raw material costs, keeping inflation elevated. Many members stated that medium- and long-term inflation expectations are rising for both households and companies, while many said price increases for consumer goods are likely to broaden from summer onwards and that underlying inflation is recently approaching 2%, requiring a focus on stabilising price growth around that level. Furthermore, a few members said consumer prices are showing signs of rising, reflecting higher import costs, while one member said markets appear to expect the BoJ to raise rates about once every six months, but added that hikes could come more quickly. The minutes unsurprisingly failed to garner any reaction and are seen as outdated, given that there was a more recent meeting in September, when the central bank delivered a widely expected 25bps rate hike to lift its short-term rate to 1.25%. RBA POLICY ANNOUNCEMENT (TUE): RBA hiked rates by 25bps to 4.60%, as expected, with the decision unanimous, while the language remained hawkish as it noted that inflation remains elevated and some of the upside risks identified in August are materialising. The Board said it would continue to take whatever action it considers necessary to return inflation sustainably to target, including raising the cash rate target further if required. The RBA stated that the conflict in the Middle East has widened and global energy prices are now significantly higher than assumed in the August forecast, while recent inflation outcomes in Australia were stronger than anticipated at the previous meeting. Furthermore, it acknowledged that the prior three increases in the cash rate target since the start of the year have tightened financial conditions and that the economy appears to be losing momentum, but added that inflation remains too high and the Board judged that, given recent developments, further tightening in financial conditions is warranted to support a return of inflation to target within a reasonable timeframe. In the press conference, RBA Governor Bullock struck a more dovish-than-usual tone. Although she stated that inflationary pressures are likely to last longer than expected and that the Board will raise rates again if needed, she also commented that if inflation comes down, it is possible no further hikes will be needed, and expressed hope that the four rate hikes already delivered will be restrictive enough to slow inflation. UK LABOUR PARTY ANNUAL CONFERENCE (WED): Chancellor Healey didn’t add too much to the narrative, with the main updates coming from PM Burnham. The core domestic developments were the social care plan, and the potential removal of the triple lock to fund this, in addition to the nationalisation of water firms. In terms of foreign policy, Burnham outlined several options for EU-UK relations, including rejoining. A comment that has received warm reaction from France and Spain, while the Commission is waiting for the long-delayed summit, expected around November 20th. Points that cannot practically be implemented without an electoral mandate to do so, and as such the prospect of an early election has been heavily touted. Overall, the conference can be taken as a success for Burnham, as his remarks caused no fresh market rout and UK debt has fared relatively better than many peers across the week. We now look to the next by-election, Autumn Budget and EU-UK summit as the near-term hurdles for Burnham; success here will inform the prospect of an early election. AUSTRALIAN CPI (WED): Australian inflation accelerated in August, with headline CPI rising to 4.0% Y/Y from 3.5%, although this was slightly below expectations of 4.1%. The trimmed mean was unchanged at 3.6%, suggesting underlying inflation pressures remain sticky. Much of the rise in headline inflation was driven by fuel, electricity and housing costs, pointing to a significant supply-side contribution. With underlying inflation still above the RBA's 2-3% target, the data supports a cautious policy stance, although the softer-than-expected headline print reduces some immediate pressure for another near-term rate hike. As a reminder, RBA Governor Bullock said she would not put too much emphasis on the August CPI number. Westpac analysts said, "but given the move in energy prices, and anecdotes of firms now passing on those rising costs, we too see upside risks to this estimate", and maintained the view that the RBA will follow up with another rate hike in November. US PCE PRICE INDEX (WED): The August PCE report was soft with downward revisions, although largely due to methodology changes. Core PCE rose 0.2% M/M, cooling from 0.4% and below the 0.3% consensus, while the Y/Y rate was unchanged at 3.0%, below the 3.3% forecast, with the prior revised down from 3.3%. Headline PCE rose 0.3% M/M, accelerating from 0.1% but below the 0.4% forecast, while the Y/Y rate was unchanged at 3.4%, below the 3.7% forecast, with the prior revised down from 3.7%. Within the report, PCE services prices ex-energy and housing accelerated to 0.4% from 0.1%, while goods prices rose just 0.03%. The softer headline figures are welcome for the Fed, although Oxford Economics highlights that the annual NIPA update revealed a larger-than-expected downward revision to core PCE inflation due to methodological changes affecting software and accessories, portfolio management, and legal services. The consultancy notes that while the revisions ease core PCE inflation at the margin, they do not erase Fed concerns around a broadening of inflation pressures from supply shocks, including the Middle East, the AI investment boom and tariffs. The downward revision was concentrated in portfolio management and investment advice fees, which OxEco suggests should not be given too much weight from the Fed's perspective. Indeed, the Fed tends to look through inflation tied to financial services and instead places greater emphasis on market-based PCE, which accelerated to 0.4% M/M from 0.1%, while the core market-based measure rose 0.3% from 0.1%. Elsewhere, Personal Income rose just 0.2%, below the 0.5% forecast and prior 0.3%, while consumption accelerated to 0.6% from 0.1%. Nonetheless, the report saw markets further pare hawkish Fed bets following Williams' remarks on Tuesday. JAPANESE TANKAN SURVEY (THU): The BoJ's Q3 Tankan survey painted a mixed picture, with sentiment among large manufacturers improving to +24 from +22, its strongest level since 2018, helped by firm semiconductor and AI-related demand, although this was below forecasts of +25. Meanwhile, sentiment among large non-manufacturers slipped to +35 from +37 as higher input costs and labour shortages continued to weigh on the services sector. Following the data, a BoJ official suggested that many manufacturers benefited from demand related to chips and AI. Sompo analysts said, "Any sign of worsening corporate funding conditions could have deterred further rate hikes... [the] data showed Japan can avoid such a situation." SWISS CPI (THU): September CPI printed in line with market consensus, with M/M at 0% (prev. 0.4%), while the Y/Y figure held at 1% (prev. 1%, SNB's implied quarterly forecast 0.9%), well within the SNB's 0-2% price stability range. Core inflation edged up to 0.5% (prev. 0.4%), with rising oil prices seemingly offset by tourism-related costs; as such, there are still few signs of second-round effects. Overall, the figures favour the SNB keeping rates on hold for the foreseeable future, although, as inflation approaches the upper end of the target range, markets will likely begin to price in the chance of a hike in early/mid-2027. US ISM MANUFACTURING (THU): ISM Manufacturing dipped to 54.5 from 54.6, shy of the expected 55. The inflationary gauge of prices paid jumped to 77.9 from 71.1, well above Wall St. consensus of 72.3. New orders and employment lifted to 55.3 (prev. 53.7) and 52.7 (prev. 51.2), respectively. Inventories fell beneath 50, while supplier deliveries were more-or-less unchanged at 59.0 (prev. 59.3). Backlog of orders jumped to 56.4 from 51.8, while both new export orders and imports dipped, but remained in expansionary territory. Overall, higher oil prices are pushing input costs sharply higher, with the prices index approaching levels last seen in the early months of the US/Israel-Iran war. Oxford Economics notes, combined with slowing supplier deliveries, manufacturers will face building price pressures in the near term. Ahead, the consultancy adds that the expansion in the manufacturing sector faces key downside risks as higher interest rates and energy prices risk delaying spending by businesses and households on durable goods. TOKYO CPI (FRI): Tokyo inflation accelerated sharply in September, with core CPI rising to 2.7% Y/Y from 1.8%, while core-core inflation increased to 3.0% from 2.0%. The pickup reflected both the unwinding of government subsidies and firmer services inflation, suggesting price pressures are becoming more broad-based. The stronger-than-expected print reinforces the case for further BoJ tightening later this year, although an immediate October move still appears less likely than a December hike as things stand. Meanwhile, the BoJ's 30th October announcement will also include the release of its quarterly forecasts. EZ CPI (FRI): Hotter than expected, but not sufficiently so to spur any action in European assets at the time. For the ECB, the data keeps October live and merits the view for further tightening ahead. Looking into the data, prices continue to climb with the headline at 3.8% Y/Y, though the core figures remain relatively stable at 2.2% and 2.5% for core and super-core respectively, as energy continues to drive prices in the bloc. A point evidenced by the energy component lifting to 18.8% (prev. 14.3%). Nonetheless, the data points to marked upside in the food-related components, and also a tick higher in services, potentially indicative of some pass-through effects emerging from the energy jump. US NFP (FRI): The September jobs report was soft, with just 29k jobs added, below the 90k consensus and the prior 133k, which was revised down from 162k. The net revision to July and August payrolls was -60k, suggesting that the labour market was not as strong as initially thought, and favourable seasonal dynamics may have supported the August release. Private payrolls slowed to 46k from a 89k, with the prior revised down from 127k. The unemployment rate also ticked up to 4.2% from 4.1%, alongside an increase in the participation rate to 61.8% from 61.6%. The weak headline payroll growth, rise in unemployment and negative revisions add to concerns around the labour market. However, the labour market has remained relatively robust and Fed officials have largely characterised it as close to full employment. One report is therefore unlikely to completely change that assessment, particularly given the Fed's emphasis on trends rather than individual data points. However, when accompanied by the downward revisions, the weakness is more notable. Pantheon Macroeconomics highlights that the three-month average of payroll growth now stands at just 51k, which it suggests is "probably slightly below the break-even pace". Moreover, officials have been more focused on the inflation side of the dual mandate, meaning the September CPI report on October 14th will be key. Nonetheless, the jobs report likely cements expectations for an October pause, particularly following the softer August core PCE data and calls for patience from Williams and Jefferson, while Bowman favours no further hikes this year. Money markets now assign just a 16% probability of an October hike, down from 24% on Thursday evening. Looking ahead, Pantheon expects the Fed to hold in October and notes December remains a close call, but expects continued weakness in payrolls alongside slower services inflation to give the FOMC sufficient grounds to look through an anticipated rise in core goods inflation and keep policy unchanged.