Today the economic calendar is quite busy, full of events that have a strong impact on the markets.
First of all, at its policy meeting the Bank of Japan decided not to change the interest rate, leaving it at -0.1%. The negative interest is necessary due to the deflation in the Japanese economy, made worse by the coronavirus pandemic.
Furthermore, the unemployment rate in Germany fell a bit more than expected to 6.2% (against a forecast of 6.3%), and the unemployment change also exceeded investors’ expectations. Germany is currently in the process of implementing new lockdowns and other Covid-19 restrictions, so it is unclear whether the recovery in its labor market will last. The inflation rate report from Germany was also more upbeat than expected, showing that inflation (YoY) in October was at -0.2% instead of -0.3.
Data from Italy showed that business confidence is improving, while consumer confidence is decreasing, which is hardly surprising in the context of the coronavirus outbreak.
The eurozone-wide reports on sentiment were better than anticipated, with increases in both industrial and economic sentiment.
Across the Atlantic, the United States published a record-high GDP growth rate of 33.1% for Q3. However, the report doesn’t indicate any significant economic recovery, as the overall GDP rate for 2020 for the United States will be heavily depressed by the country’s ongoing battle with the coronavirus.
In addition, although the US reported lower initial jobless claims numbers than expected, the continuing claims are higher than investors were hoping for, showing just how slow the US labor market is to recover. As of mid-October, there are still 7.75 million unemployed Americans.
Today the European Central Bank held its monthly policy meeting, arguably one of the most highly anticipated events this week. Despite the resurgence of the coronavirus across the European Union, the ECB did not make any changes at today’s gathering. President Lagarde will give a press conference later and may hint at adjustments possibly on the agenda for the next meeting.
For traders following the stock markets, today will be a day defined by lots of earnings reports. Some of the biggest names in the tech sector are reporting today, including Apple, Facebook, Alphabet, and Amazon.
