3 Numbers to Watch: EZ PMI, DE IFO, US Home Sales - Plus FOMC

The Bank of Canada's decision to maintain its hawkish rhetoric and keep the phrase: "some modest withdrawal of monetary policy stimulus will likely be required" in its latest monetary policy statement caught investors off guard, with USDCAD falling sharply yesterday. The central bank left rates unchanged but failed to change its policy outlook, despite the weaker growth prospects. The Bank of Canada is due to release its monetary policy report today, which will give additional insight into the outlook for its economy.

Today's FOMC meeting will, as always, be closely watched to see if Ben Bernanke can come up with a number somewhat longer than infinity. Expect an announcement around 1915 GMT. We also have a string of PMI data to report on, including measures for manufacturing output in the Eurozone. We then move on to the IFO Business survey in Germany and US New Home Sales. 

Eurozone Manufacturing PMI (08:00 GMT) Manufacturing in Eurozone is expected to hold steady in October, with consensus of analysts forecasting that the PMI measure will rise from 46.1 to 46.5. This would represent a 15th consecutive month of contraction. The news comes as Germany's finance ministry warned that economic growth in the Eurozone's largest economy will experience a noticeable slowdown toward the end of the year. German manufacturing PMI is also due out today and analysts forecast the index to rise to 48 in October, from 47.4 last month.

German IFO survey (08:00 GMT) Business sentiment in Germany is expected to pickup slightly in October, despite the continued uncertainty surrounding Europe and its banking union. Analysts forecast that the business climate indicator will rise to 101.6 in October from 101.4, and the business expectations index will rise to 93.6 from 93.2. Last week, EU leaders met in Brussels to discuss new plans to give the European Central Bank power to supervise banks in the region. However, a disagreement between German and France over the timeframe for dampened expectations of any deal emerging before the end of the year. The more immediate risk is that either Greece or Spain will fail to agree on the necessary austerity measures to receive bailout funds, and with tensions mounting in Madrid and Athens investors will remain nervous for some time.

US New Home Sales (08:00 GMT) Investors will be looking for more positive news of a recovery in the US housing markets when the US Commerce Department releases latest estimates on hew home sales for September. Analysts forecast that 382,000 new homes were built during the month compared to 373,000 in August, when sales were down 0.3 percent. A strong reading here will offer further evidence that the US housing market is already on a stronger footing.

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