SCOREBOARD Super-cutter week

If only the Fed were so included, we might justifiably call the coming week a 'super cutter' – I expect that this week will be dominated by the decisions by the Bank of Canada (BoC) on Tuesday and the Bank of England (BoE) to cut their benchmark policy rates by 25bps, to 4.25 per cent and 5.5 per cent respectively.

A dead rubber for the RBA (Wednesday), the RBNZ and the ECB (both Thursday) and ongoing speculation about the FOMC's December 11 decision (a 50bps cut is not out of the question given the tightening of financial conditions) completes the roundup of major central banks this week.

If the BoC and ECB banks start cutting rates this week, as I expect, this is likely to promote bull steepening of bond curves globally. Central banks don't exactly act in concert, but they all look at the global backdrop, and they are all professionals, so the facts turn them all similar shades of pale.

The facts are that funding costs have blown out once again globally, and that this effectively constitutes an increase in the 'tightness' of monetary policy – just when policy needs to be easing. This increases the likelihood that any central bank will be trimming rates in the near future (and equivalently reduces the likelihood that the RBA, or other central banks, will want to tighten policy). To the extent that these rate cuts also effectively bring down (expected) floating rates, we could see swap spreads compress a little.

In strictly local data, the highlight of the week is the release of Q3 Aussie GDP. There is first the Q3 business indicators (profits and inventories) data out today, and next the Q3 government accounts data (Tuesday) to get through: by that time we should have a fair fix on what looks to be another very solid number.

Many of the important October reports are also out: trade (today), building and retail (both Tuesday). I expect that trade will disappoint as exports continue to lag; also that building will snap lower on a dip in the volatile apartment approvals number; and that retail will be boosted by the increase in the minimum wage on October 1. There's also the minor manufacturing PMI and TD-MI inflation gauge this morning.

In the US, it's US ISM (Monday and Wednesday) and payrolls (Friday) – the most significant US monthly reports. Significantly, there are now cowboys that are forecasting manufacturing ISM below 50 points, and a negative result for non-farm payrolls. The medians remain more moderate (50.7 for ISM and 75k for payrolls), but the mere fact that economists are thinking about both of these indicators going 'wrong' tells you something about the attitude out there. If either of these releases do go sour, or if the tightening in funding markets becomes more marked, it may seal the case for a 50bps cut in the Fed funds rate on December 11.

The Fed's Paulson, Rosengren and Yellen are speaking on Monday and Tuesday, and will give us some final insights before the Fed-meeting blackout.

With Aussie GDP done on Wednesday, and the payrolls report not out until after our home time on Friday, it could be a slow end to the week (though the US ADP report, on Wed, usually attracts some punters).

Lucky for the Kiwi punters that the RBNZ will be releasing its Q4 MPS on Thursday morning – in which I suspect that the RBNZ will show a little more confidence that the housing market, and the economy more generally, is slowing. The only other thing that catches my eye is revised Q3 Japanese GDP on Friday.

Matthew Johnson is senior economist at ICAP Australia