US data has generally been positive: initial jobless claims fell last week to 369k compared to 392k the previous week; new home sales were up by a strong 5.7% month on month; and Q3 GDP growth of 2% annualized was higher than expected.
However, the Fed has made it clear that it needs the US recovery to be well underway and employment far higher than it is today before considering ratcheting back its easing policies.
Key events to watch this week: US payrolls data
Given the important role employment data plays in the Fed’ policy decision making process, the non-farm payrolls data for October will be closely watched.
Revisions to previous month’s readings will also be scrutinized in this volatile series. US ISM manufacturing and factory orders along with final manufacturing PMI data will help confirm the strength of the industrial cycle.
The market is expecting a 0.4% quarter-on-quarter contraction in Spanish Q3 GDP to be announced this week. A deeper contraction could push the case for more urgency in Spain requesting a bailout.
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