Analysts fear the spending-heavy budget could put upward pressure on inflation and had investors betting that the Bank of England may have to slow the pace of future rate cuts. Two-year gilt yields have surged 27 basis points so far this week to the highest since May, although that seems tame compared with the 89-basis-point rout that followed Liz Truss' 2022 effort.
In the U.S., earnings are due from Exxon Mobil and Chevron, along with the high-profile ISM manufacturing survey and the non-farm payrolls report.
Hurricanes and strikes have made it tricky to read the jobs data. Forecasts are centred on a rise of 113,000 new jobs in October but a strong ADP report and lower jobless claims data suggest the risks are to the upside.
The unemployment rate likely stayed at 4.1%, so barring a major surprise, markets will likely stick to wagers that the Federal Reserve will cut by a quarter-point next Wednesday. That is more than 94% priced in.
Of course, the day before that there is the U.S. presidential election, with candidates Donald Trump and Kamala Harris running neck and neck. Some investors have been trading on expectations that a Trump win could bring inflationary policies.
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