The Day at a Glance | November 3 2021

The Top

*The United States Federal Reserve will hold a monetary policy meeting.

*New wave of the virus in China is the largest since Wuhan; 600 new cases extended to 19 of the country`s 31 provinces.

*Lagarde reiterates that the likelihood of seeing interest rates increase on behalf of the ECB next year is low.

*Employment in the United States private sector during October (ADP 571k vs 400k e.).

*Economic indicators: Unemployment in Europe fell slightly (7.4% vs 7.5% prev., Sep.); services ISM is expected to be made public in the U.S. (62e.).

Economic environment

Important meeting in the FED. The Federal Reserve`s Open Market Committee will meet to make a monetary policy decision (12:00 pm Mexico City time) this afternoon. The Committee is expected to finally announce the asset purchasing program`s reduction and maintain the federal funds rate at its current range (0%-0.25%). The FED is expected to confirm the withdrawal of 15 billion dollars every month from its purchasing program, which currently operates at a pace of 120 billion monthly dollars. This would lead the end of the purchasing program to occur halfway through 2022; even though the FED`s statement could mention that the withdrawal`s pace would depend on the economy`s evolution. Additionally, it`s possible that the FED will modify its language about the temporariness of inflation, which has surpassed expectations. However, this is not expected to substantially modify the central bank`s monetary stance with respect to interest rates. The FED is expected to reaffirm that the process of increasing rates will take time and will begin despite inflationary risks. Chair of the FED Jerome Powell will hold a press conference after the decision is made, in which he will most likely answer questions about the persistence of inflation, the FED`s plans to increase rates, and his opinion regarding markets, which are already taking into account a rise in rates as soon as halfway through 2022.