Here are the top 5 most important things to know for today.
1. U.S. advance Q3 GDP in focus
The U.S. is set to release preliminary data on third quarter gross domestic product (GDP) at 12:30GMT Friday, though the risk for markets may be to the downside with Federal Reserve (Fed) regional banks forecasting lower growth than expectations.
Consensus expects the reading to show a significant strengthening from the second quarter’s 1.4% growth to a 2.5% expansion.
However, the latest Atlanta Fed projection released on October 27 was at 2.1%, while the New York Fed’s forecast from October 21 was for 2.2% growth.
2. Market bets on Fed rate hike may shift on economic growth
With several Fed officials having indicated that interest rates could rise in December if the economy remains on track, market participants were keeping a close eye on Friday’s reading of the U.S. GDP.
The U.S. central bank holds its next two-day monetary policy meeting on November 1 and 2 with markets currently pricing in the odds of a rate hike at just 10.3%.
Analysts widely believe that the U.S. central bank will hold off on making a move next week due to the fact that the presidential elections take place shortly afterwards on November 8.
Fed fund futures currently place the probability of a move at the following meeting in December at 74.5%.
3. Oil under pressure ahead of doubts on OPEC accord
Oil prices were lower during European hours on Friday, as investors looked ahead to a technical meeting of the Organization of the Petroleum Exporting Countries (OPEC) to discuss the details of an eventual agreement on oil production freezes and/or cuts by member countries.
Analysts have been skeptical that OPEC would reach a meaningful deal on curbing crude output as Iran, Iraq, Kenya and Libya –equivalent to one third of the cartel’s production- seen as being excluded from taking any action.
OPEC members were scheduled to meet on Friday with invited non-OPEC producers expected to join the group on Saturday to continue discussion and focus on Russia to see if Moscow will clarify its intent to participate.
Friday’s meeting was meant to establish the building blocks of a future accord with details on individual output quotas to be finalized at the official OPEC meeting set for November 30.
U.S. crude oil futures fell 0.36% to $49.54 at 9:56GMT, while Brent oil traded down 0.20% to $50.37.
4. U.S. earnings season halfway over
249 of the components of the S&P 500 had reported quarterly earnings as of Thursday, marking the halfway point in the season.
Among those reporting so far, third quarter earnings have risen by 6.7% and sales have advanced by 1.6%, according to data from The Earnings Scout.
73% of those firms have beat on profit with 61% exceeding revenue expectations.
On Friday, investors will trade on earnings reported after the prior close. Alphabet (NASDAQ:GOOGL) saw shares rise nearly 1% in the after hours market as the Google parent beat on both top and bottom line.
However, Amazon.com (NASDAQ:AMZN) tumbled more than 5% in Friday’s pre-market trade after a holiday season forecast disappointed.
Later in the session, market participants would focus on earnings reports from blue-chip oil companies Chevron (NYSE:CVX) and Exxon Mobil (NYSE:XOM). MasterCard, Hershey and Xerox (NYSE:XRX) were also among firms scheduled to report before the open on Friday.
5. Bonds undergo “bloodbath” as rate hike expectations rise
Benchmark 10-year U.S. and euro zone yields rose to their highest since May on Friday and 10-year British yields were firmly on track for their biggest monthly rise since January 2009, the second biggest in over 20 years.
Sovereign debt has recently undergone a sell-off, with the drop in prices correspondingly increasing yields, triggered by increasing bets of a rate hike by the Fed and expectations that inflation is on the rise.
U.S. Treasuries could see another leg up in American trade if the U.S. GDP reading beats consensus, cementing the possibility of the next rate hike arriving in December.