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Waiting for QE Extension and GDP figures | Calamatta Cuschieri

The European Central Bank is expecting to outline plans on its quantitative easing program, with the release of the third quarter GDP figures for the major economies

calamatta_cuschieri
Calamatta Cuschieri
23 October 2017, 12:01pm
Earnings season is in full swing in the US and UK, with tech firms in the US centre-stage, and UK banks releasing their Q3 earnings results
Earnings season is in full swing in the US and UK, with tech firms in the US centre-stage, and UK banks releasing their Q3 earnings results
European Central Bank Meeting

This week’s European Central Bank (ECB) meeting will be much in focus, due to widespread expectations that the central bank will outline plans on how to wind down its €60 billion monthly asset purchases. Analysts are generally expecting the ECB to extend its quantitative easing program by six months to June next year, but at the same time lowering the amount it buys each month from next year. Some speculative talk indicate the ECB considering the cut by half to €30 billion monthly, starting January 2018. In a nut shell, longer program with lower purchases.

European Economy

The European economy is defending its positive and strong performing economy, with Purchasing Manager Index (PMI) surveys showing growth is becoming increasingly broad-based, accompanied by rising price pressures. The rise in output and the intensification of price pressures mean that the ECB is starting to see the fruit of it stimulus. Thus October’s PMI will play an essential role in determining the health of the economy and this can provide indications for future monetary policy adjustments.

United Kingdom

The UK will be announcing the estimates for the third quarter Gross Domestic Product (GDP), which will be a major release before the Bank of England’s next policy meeting. The lack of positive performance expectations, resulting in a small economic expansion, would hardly change the views of the monetary policy committee. On the other hand, a strong number, could mean a seal on an interest rate hike deal.

United States

Third Quarter GDP figures are likely to show a slow pace in economic growth, as a result of hurricane-related impacts. On the other hand, some PMI surveys indicate that the US economy showed encouraging resilience despite the hurricane disruption. Markets will look to signs of post-hurricane rebuilding efforts, thus increasing the focus on the release of the PMI data for October.

Meanwhile, earnings season is in full swing in the US and UK, with tech firms in the US centre-stage, and UK banks releasing their Q3 earnings results.

 

 

Disclaimer

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website 

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