Macroeconomics: The Day Ahead for 4 November 2026

While developments in the Middle East and Ukraine conflicts will continue to be the key overarching influence, and there is also a busy run of data including Services PMIs/ISM, Eurozone CPI, US ADP Employment and Trade, the US mid-term election results will dominate proceedings. The US Treasury Quarterly Refunding announcement, rate decisions in Sweden, Poland and Brazil feature in terms of events, while ARM and Qualcomm top the earnings schedule, with BMW, CF Industries, Kraft Heinz and Novo Nordisk also likely to garner some attention.

US Mid-Term Elections

The US mid-term elections once again proved that opinion polls are often wide of the mark relative to actual outcomes, but the key takeaway from the results was that the Republicans lost these elections, rather than the Democrats winning on more appealing messaging. It was “the economy, stupid” that decided the outcome, as had been clear from the list of voter concerns.

Market reaction has been relatively muted despite the Democrats’ “clean sweep”, with a relatively sharp 3.0% rebound in Gold perhaps the most notable price move, though it has not yet breached the downtrend line in place since mid-August (see chart). The White House has said it will work with Congress, and that it accepts the results, but these are merely stock reaction “words”, which say nothing about what will happen in coming months.

Markets are sensibly taking a “wait and see” view on what happens next with the Iran conflict, above all given the numerous “false” signals since the start of the conflict at the end of February, and the fact that even if an agreement is reached, it will still take at least a few months to restore flows of products, by-products and gas, and many companies will be cautious in making assumptions about the durability of any agreement.

US energy behemoths have sent a very clear signal in their quarterly earnings briefings that they are focused on balance sheet and debt “prudence”, and remain very cautious about both up- and downstream investments.

The Democrats remain a divided party (centrist vs. “progressive” left), and there is as yet no sign of a leader that can unite both factions going into the 2028 presidential election, which effectively starts today. Meanwhile, after such a resounding defeat, there is a similar open question on who will lead the Republicans into the 2028 election.

For markets, the assumption is that the new Congress will be more challenging for the hydrocarbon sector and likely to seek greater regulation of the AI/Tech sector. The more complex question is how it frames its highly likely investigations into the administration and its officers, both given the failed impeachments in the 2018-2020 period and given that voters will take a very dim view of endless investigations if little is being done to address key issues such as cost of living pressures, housing affordability and indeed data centre regulation.

Eurozone CPI and US ADP Employment

Eurozone CPI forecasts were revised up in the wake of last week’s surge in Italy and higher-than-forecast French HICP, with headline CPI seen up 0.4% m/m to take the y/y rate up to 4.0%, but with core CPI likely to remain relatively well contained at 2.5%. Market reaction is likely to be minimal barring a higher-than-expected core reading.

In the US, ADP Employment is seen easing to 66K from September’s 90K (though yesterday’s jump in JOLTS Job Openings imparts some upside risks). This stands in sharp contrast to the tepid 46K increase in Private Payrolls, even if the household survey posted a much stronger gain in Employment. As previously noted, Warsh has placed greater emphasis on the Household survey, per se relegating the importance of the Establishment survey, and in truth the ADP survey has been better correlated with the Household survey for some time.

Treasury Quarterly Refunding

The Treasury Quarterly Refunding announcement has been the subject of speculation about some substantial changes in issuance, despite the prior quarter announcement continuing to commit to an unchanged pattern of sales across maturities for the “next several quarters”. Rather than break that prior commitment, it may rather offer guidance that there will be changes in 2027, and may also announce an increase in buyback volumes.