A new week begins with the headlines mainly dealing with Covid-19 and the US presidential election. Italy and Spain, the European countries most affected by the first wave of the coronavirus pandemic, have announced comprehensive new measures to combat increases in the number of new cases.
This week, the activities of some major central banks will also be followed.
ECB
European Central Bank President Christine Lagarde and other policymakers are meeting on Thursday. Analysts expect the ECB to keep its cards closed and interest rates already in the negative territory stable.
The European Union, and the eurozone, in particular, are facing a wide range of simultaneous economic challenges, such as deflation, a second wave of Covid-19 infections, an impending recession, a delay in the bloc’s recovery fund talks, and the uncertainty brought about by post-Brexit scenarios.
Most economists estimate that there will be an additional stimulus from the ECB in December, with the ECB’s bond-buying program being expanded to 500 billion euros.
The ECB will also publish its lending survey Tuesday, which is expected to shed some light on the health of banking in the eurozone.
BoJ
Analysts are confident that the Bank of Japan (BoJ) will not announce any policy changes when the meeting ends on Thursday, but the bank’s statement on the outlook will be interesting.
The BoJ is expected to lower its GDP growth forecast for the fiscal year ending March 2021. Investors will seek clarity on how this will affect asset expansion.
BoC
The Bank of Canada (BoC) is also meeting on Wednesday. A change in the monetary policy of the North American country bank is not expected. BoC is expected to keep its rates at 0.25 percent.
US GDP
As the most important economic data of the week, we will be watching preliminary figures for the third-quarter gross domestic product from the US.
The US GDP figure will be announced on Thursday. The median estimate of the economists who participated in a survey by the British Financial Times is that the US growth will be at 7 percent on a quarterly basis.
US consumer confidence data will be released on Tuesday. Analysts will also monitor the weekly unemployment claims on Thursday and personal income and expenditure on Friday.
Stimulus package
Despite the optimistic outlook, economists are still concerned about a lack of consensus between the Trump White House and the democratic Speaker Pelosi-led House of Representatives in a new economic stimulus bill negotiations that have been negotiating for months.
Pelosi said on Sunday that she expected news from the Trump administration on Monday. The parties are expected to continue discussions this week.
US elections
The US is entering a week grappling with the rise in Covid-19 cases as President Donald Trump and former US Vice President Joe Biden continue their campaign for the November 3 presidential election.
Biden continues to lead in national polls and, more importantly, in swing states.
CCP plenum
The Central Committee of the Chinese Communist Party (CCP), which directly controls the world’s second-largest economy, will hold its annual plenum for 4 days this week.
Investors watching China expect the CCP plenum to discuss the country’s semiconductor industry, the next crucial Five-Year Plan, the worsening global economy, and technological, commercial and geopolitical polarizations with the United States.
The CCP plenum will also discuss a broad plan for the next 15 years.
US-China confrontation
The United States will continue to intensify diplomatic and military re-positioning this week to tighten the ranks against the CCP’s commercial ambitions and territorial claims in the Indo-Pacific.
US Secretary of State Mike Pompeo will go on a tour of Asia covering Sri Lanka, India, the Maldives, and Indonesia to counter China’s growing influence in the region.
The US Navy began a joint exercise with Japan on Monday. The two countries will conduct more extensive naval exercises next month with the participation of India and Australia.
Yesterday, US National Security Adviser O’Brien announced that the US coast guard would be deployed in the Western Pacific in response to “destabilizing and malign” Chinese activities targeting US-allied countries.
Economic Calendar
Monday: US New Home Sales (Sep)
Tuesday: US Core Durable Goods Orders, US CB Consumer Confidence
Wednesday: Australia CPI, Canada BoC Interest Rate Decision, US Crude Oil Inventories, BOC Press Conference
Thursday: BoJ Monetary Policy Statement Tentative, BoJ Outlook Report, BoJ Press Conference, German Unemployment Change, US GDP, US Initial Jobless Claims, ECB Deposit Facility Rate, ECB Marginal Lending Facility, ECB Monetary Policy Statement, ECB Interest Rate Decision, ECB Press Conference, US Pending Home Sales
Friday: German GDP, Eurozone CPI, UK Autumn Budget, UK GDP, Japan Tankan Large Manufacturers Index, Japan Tankan Large Non-Manufacturers Index
