Amid all the talk concerning possible cuts to U.S interest rates tomorrow, RBC Financial Group economists caution that such a move by the Federal Open Market Committee is not a certainty.

RBC notes that October’s U.S. non-manufacturing index from the Institute of Supply Management slipped to 53.1 from 53.9 in September. But this was better than expected. “This figure continues to point to expansion in U.S. service-producing industries, but the pace seems to be moderating somewhat from previous readings. While the new orders and backlog of orders components showed mixed results, the employment component fell slightly again this month and remains below the critical 50 mark,” says RBC. “The new export orders component had the most significant decline of any component in October, falling by 8.5% to 49. Following the rapid increase in September, this suggests global service sector demand may be fragile.”

RBC argues that the report continues to paint a picture of a relatively healthy U.S. service sector. “However, this should have very little bearing on tomorrow’s eagerly anticipated Fed decision on rates,” it says. “What the market is more concerned about is the weaker picture that recent data have painted for manufacturing activity south of the border.”

RBC concedes that markets continue to expect a 25 basis-point cut. “However, it should be noted that while the U.S. economy may be limping along a recovery path, expected growth is by no means heading in a downward spiral. Therefore, the alternative scenario for tomorrow’s rate decision is likely to be no change rather than the 50 basis-point cut that some would like to see,” it suggests.