This Week's Macro Outlook: CPI Data Tests Fed's Stance on Pausing Rate Hikes, IMF Speech by Walsh Takes Center Stage

This week, global markets will focus on the U.S. September CPI data to assess whether the Federal Reserve will maintain its "non-consecutive rate hike" stance. While most Fed officials believe another rate hike may be possible this year, recent comments show they are in no hurry to act at consecutive meetings. Market pricing for a rate hike on October 28 has fallen to around 19%, while a December rate hike is fully priced in. Geopolitically, the stalemate between the U.S. and Iran and the escalating situation in Yemen continue to support oil price risk premiums, while the U.S.-Russia diesel supply agreement has limited short-term impact. Key events are as follows: Tuesday: Cleveland Fed President Mester delivers a speech; Fed Governor Waller speaks at the India Bloomberg New Economy Forum; U.S. September NFIB Small Business Confidence Index, ADP employment change for the week ending September 26, and September existing home sales (annualized); OPEC releases its monthly oil market report. Wednesday: U.S. September CPI and core CPI; Fed officials make a flurry of remarks ahead of the release of the Beige Book; Boston Fed President Collins, Fed Governor Bowman deliver speeches; IEA releases its monthly oil market report. Thursday: U.S. API crude oil inventories for the week ending October 9; U.S. initial jobless claims for the week ending October 10, September retail sales, September PPI and core PPI, October New York Fed and Philadelphia Fed manufacturing indexes; G20 Finance Ministers and Central Bank Governors Meeting. Friday: Fed Chair Powell attends the IMF Annual Meeting in Bangkok and holds a fireside chat with IMF Managing Director Georgieva; Cleveland Fed President Mester delivers another speech; U.S. September Import Price Index, industrial production; U.S. EIA crude oil inventories for the week ending October 9.