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Tuesday’s October CPI is the last inflation report before the Fed decides on 9 December, and futures already price about an 80% chance of a rise after Friday’s payrolls beat. It will also arrive without its usual headline 12-month rate, because the 2025 shutdown left no October 2025 prices to compare against. Producer prices follow on Friday. In between, Cisco and Applied Materials report on Thursday evening, the first big reads on AI spending since the Nasdaq’s worst day since April 2025. The UK gets its first look at third-quarter growth on Thursday morning, a week after the Bank of England’s first rise of this cycle.
Last Week:
US Midterm Elections Democrats won control of the House and the Senate. They flipped Texas, Ohio, North Carolina, Iowa, Kansas and South Carolina, and Susan Collins conceded in Maine (SBS News). S&P 500 futures fell as much as 1.4% overnight on fears of tighter rules on AI and data centres, then turned positive by Wednesday morning UK time. Trump told Fox News, “Congratulations to the Democrats.” The new Congress sits on 3 January 2027. (SBS News)
Bank of England Decision (November) Bank Rate rose to 4% from 3.75% on an 8-1 vote, the first rise since 2023. The ninth member wanted a bigger half-point rise, and nobody voted to hold. Governor Andrew Bailey said the move “shouldn’t be seen as the first in an inevitable long sequence of hikes”, after markets had gone in pricing at least 3 more quarter-point rises next year (Reuters, via RTE). (MoneyWeek, RTE)
The AI Sell-Off (Thursday 5 November) The S&P 500 fell 4.36% to 7,353.73 and the Nasdaq 5.52% to 24,315.00, the worst day since April 2025, as the fear that new state rules would slow data centre building spread from the builders to the chipmakers. Sandisk fell 22.3%, Micron 17.5% and AMD 17.3%. Friday’s bounce left the S&P at 7,376.86, down 2.68% on the week and its worst week since June, and the Nasdaq at 24,579.42, down 3.37%. (Investrade, Yahoo Finance)
US Jobs Report (October) 165,000. Consensus was 65,000 (FXStreet). Unemployment fell to 4.1% from 4.2%, hourly pay rose 0.4% on the month and 3.1% on the year, and September was revised up to 60,000 from 29,000. Futures pricing for a December rise climbed to about 80% (CME FedWatch and LSEG, via BigGo Finance), from 68% on Thursday. (BLS)
The setup: the 10-year Treasury yield ended the week at 4.86% and Brent crude at $98.32, down about 13% on the week as hopes grew that the Iran war will wind down after the vote (Investrade). Payrolls moved the December decision onto inflation. Tuesday’s CPI is the next test, and Thursday’s chip and networking results test whether the AI spending that sold off on Thursday is still being placed. (Investrade)
Week at a Glance
🔴 US CPI (October): Tuesday, 8:30 AM ET / 1:30 PM GMT
🔴 Cisco and Applied Materials Results: Thursday, After Close
🔴 US PPI (October): Friday, 8:30 AM ET / 1:30 PM GMT
🟠 UK GDP, First Estimate (Q3): Thursday, 2:00 AM ET / 7:00 AM GMT
🟠 CoreWeave Results: Tuesday, After Close
🟠 Fed’s Christopher Waller in London: Tuesday, 4:00 AM ET / 9:00 AM GMT
🟠 US 10-Year and 30-Year Treasury Auctions: Tuesday and Thursday, 1:00 PM ET / 6:00 PM GMT
🟠 BoE Governor Andrew Bailey: Monday, 12:25 PM ET / 5:25 PM GMT
🟡 US Veterans Day, Bond Market Closed: Wednesday, All day