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26 October 2026
This week brings a busy calendar of central-bank decisions, economic data and corporate earnings. The Fed meets on Wednesday, followed by the ECB on Thursday and the Bank of Japan on Friday, with all three expected to leave rates unchanged. Investors will be focused on the outlook for interest rates amid elevated energy prices and persistent inflation, while results from major technology companies should provide further insight into AI-related capital expenditure and earnings prospects.
Today, Germany’s Ifo business climate index rose to 90.2 marking a sixth consecutive monthly improvement. China’s Fifth Plenum also begins, running through Thursday, with policy signals likely to be closely scrutinised. Tuesday brings China’s industrial profits and US durable goods orders and consumer confidence. Wednesday is particularly busy, with the FOMC decision, the UK Budget and earnings from Alphabet and Microsoft. Thursday brings US Q3 GDP, September PCE inflation and jobless claims, alongside the ECB decision, and results from Amazon and Intel. Friday kickstarts with the BoJ rate announcement followed by economic releases include eurozone GDP and unemployment, the US Employment Cost Index and Chicago PMI.
Last week, markets were influenced by technology-sector volatility, as investors assessed earnings prospects and rising AI-related capital expenditure, alongside renewed geopolitical concerns and higher oil prices. The S&P 500 fell 0.47% over the week, while US Treasuries recovered, with the 10-year Treasury yield declining 8bps to below 5%. Brent crude rose over 6% to $116.72pb, reflecting concerns about potential supply disruption in the Middle East. The US dollar ended the week marginally lower.
Fed Chair Warsh avoided prejudging the forthcoming decision, while the latest data leave markets weighing the prospect of an extended pause against the possibility of further tightening later in the year. The Fed’s statement and press conference will therefore be closely watched for clues on the path ahead.
China’s economy grew by 4.5% year-on-year in the third quarter, following growth of 4.3% in the second quarter, with growth for the first nine months reaching 4.6%. Industrial production remained relatively resilient, although the property sector continues to face challenges. The Fifth Plenum may offer important signals on the policy priorities for the next phase of economic development. Meanwhile, the renminbi has continued to appreciate against the US dollar, with the currency’s near-term direction influenced by domestic policy signals and broader dollar movements.