US October CPI seen up 0.3% month on month in a week that could shape the Fed's rate-hike decision

A series of inflation and economic indicators from the US, Japan and Europe are due this week, with US October consumer price index (CPI) growth expected at 0.3% month on month. The core index, excluding food and energy, is expected to rise 0.2% month on month, making it a key focus as a factor in the FOMC's rate-hike decision. Year-on-year data were not released because of the government shutdown last October, leaving the month-on-month figures as the main guide.

In the UK, the preliminary estimate of GDP for the July-September quarter is due, with growth expected at 0.7% quarter on quarter. The Bank of England has raised rates by 0.25 percentage points, and market focus will turn to expectations for further rate hikes. In Japan, the October corporate goods price index is expected to rise 6.5% year on year. A reading above expectations could affect expectations for an additional Bank of Japan rate hike. In China, October CPI and PPI will be released, with CPI expected to rise 0.8% year on year and PPI expected to fall 5.4% year on year. Turkey's central bank is scheduled to release its quarterly inflation report ahead of its December monetary policy meeting, potentially affecting its policy decision.

From Japan's perspective, the timing of the Bank of Japan's next rate hike is considered dependent on the stance of each committee member, and decisions including those at the next meeting are expected to be a market factor. Depending on the US CPI result, the dollar could face volatility, while a CPI reading below market expectations could curb movements in the dollar as rate-hike expectations recede.

The focus for China's indicators will be whether renewed attention is paid to weak domestic demand. Trends in domestic corporate prices and relative inflation rates could affect financial conditions going forward.