Week Ahead Economic Preview: Week of 27 October 2025

The following is an extract from S&P Global Market Intelligence's latest Week Ahead Economic Preview. For the full report, please click on the 'Download Full Report' link.

Rates setters meet in the US, Eurozone, Japan and Canada

It’s a busy week ahead for the markets with interest rates decisions due from policymakers in the US, Canada, Eurozone and Japan.

A ‘data dependent’ FOMC faces a challenging environment given the disruption to official data releases caused by the ongoing government shutdown. However, with inflation coming in below expectations at 3.0% in September, and the flash PMI data showing a further cooling of price pressures in October as firms squeeze their margins, it is no surprise that markets are currently fully pricing in a 25 basis point cut at the October meeting. That would take the federal funds rate to a range of 3.75% to 4.00%, its lowest since late 2022.

In the likely continued absence of official data releases (the week was scheduled to see updates to GDP and PCE inflation), the US nevertheless gets some news on the economic front from regional Fed surveys in Dallas and Richmond, as well as Case-Shiller house prices and consumer confidence data. These surveys follow the PMI showing the US economy enjoying an encouragingly strong start to the fourth quarter, albeit with lacklustre hiring. Policymakers will be hoping to see the release of more official data before their December meeting, for which a further rate cut is by no means certain.

The odds also favor a 25 basis point rate cut by the Bank of Canada, though there are concerns over a recent rise in inflation. The central bank’s updated projections will also be eagerly awaited, especially as uncertainty grows over US trade policy after the US abruptly cancelled trade talks.

No change in monetary policy is meanwhile expected at the ECB, where the October flash PMI data showed benign inflationary pressures accompanying an upturn in the pace of economic growth to one of the highest over the past three years. The region also sees third quarter GDP estimates released alongside October’s official flash inflation print.

Things are more nuanced at the Bank of Japan, where views are evenly spread on whether the October policy meeting will see interest rates raised again, or whether policymakers will decide to await more signs that the economy is sufficiently resilient in terms of economic growth before hiking. While flash PMI data pointed to another uptick in price pressures, supporting calls for a further tightening of policy, the survey also showed a weakening of output growth amid heightened international economic uncertainty.

US sustains its lead among developed economies

S&P Global’s flash PMI surveys showed the US sustaining a solid lead in terms of output growth among the major developed economies in October. Growth accelerated across the combined US goods and services sectors to one of the strongest rates seen over the past three-and-a-half years. However, growth also accelerated in the eurozone to the joint-fastest in almost two-and-a-half years, as improving domestic demand in the single currency area helped drive a stronger service sector expansion and a further recovery of manufacturing output. While relatively lacklustre performances were meanwhile seen in the UK and Japan, both continued to expand.

Measured across all four major developed economies, output growth in October was the fastest since August of last year.