Last week, U.S. equity markets experienced a pullback, primarily driven by declines in the tech sector, leading the S&P 500 to drop 1.37%. In the bond market, decreasing election uncertainty and a resilient labor market caused yields on 2-year and 10-year Treasuries to rise to 4.212% and 4.386%, respectively, slightly widening the yield spread to 16 basis points. Meanwhile, the dollar index remained steady around 104.

Key Economic Data Review for Last Week:

U.S. Q3 GDP: U.S. Q3 GDP grew at an annualized rate of 2.8% (previous: 3.0%). Consumption rose by 3.7% (previous: 2.8%), contributing 2.46 percentage points, while imports grew by 11.2% (previous: 7.6%), with a negative contribution widening, reflecting strong consumer demand. Residential investment and inventory changes acted as primary drags, but as rate expectations ease and election uncertainty dissipates, the housing market and corporate investment are expected to strengthen.

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Bank of Japan Rate Decision: The Bank of Japan held rates steady at 0.25%, in line with market expectations. BOJ Governor Kazuo Ueda indicated that if economic performance aligns with projections, further rate hikes could be implemented. He also stated that with a more stable market environment, the BOJ no longer needs extra time to observe market dynamics.

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U.S. October Employment Data: Due to the impacts of hurricanes and the Boeing strike, October nonfarm payrolls increased by only 12,000 (previous: 223,000), while the unemployment rate held at 4.1%. However, ADP data shows private-sector employment rose by 233,000 (previous: 159,000), suggesting a robust labor market when unaffected by temporary factors.

 
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Key Economic Data Review for This Week:

China NPC Standing Committee (11/4 – 11/8): Markets will closely watch for additional fiscal stimulus measures and debt issuance aimed at boosting domestic demand. According to Reuters, the upcoming policies could total approximately 10 trillion yuan ($1.4 trillion).

U.S. Presidential Election (11/5): Odds from RealClear Politics and various betting platforms indicate Trump as the likely winner of this election. Polls, however, show both candidates in close contention, with results from key states expected between 11/6 and 11/8.

U.S. Monetary Policy Decision (11/7): Recent U.S. economic data has been strong, with core PCE growth in Q3 easing to 2.2% (previous: 2.8%). Despite a lower-than-expected nonfarm payroll increase of 12,000 in October (due to hurricanes and strikes), the unemployment rate remains at 4.1%. With the labor market still stable, markets anticipate the Fed will cut rates by 25 basis points at this meeting, with another 25-basis-point cut expected in December.

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• Exclusive: China considers over $1.4 trillion in extra debt over next few years