Global investor sentiment remains heavily influenced by geopolitical tensions in the Middle East, which have kept Brent crude prices firmly above the USD 110 per barrel threshold, generating renewed inflationary pressure and dampening hopes for aggressive monetary easing by major central banks. During the European trading session, attention will focus on preliminary Q3 GDP growth estimates from France, Germany and the euro area, as well as key consumer price inflation (CPI) readings from Germany and Poland. The morning data releases will determine the short-term direction of the euro and sovereign bond valuations, potentially triggering increased volatility in the EURUSD and EURPLN currency pairs, as well as European equity indices. In the second half of the day, volatility is expected to shift to Wall Street, where financial reports from major oil and pharmaceutical companies, alongside consumer sentiment indicators, will be released.

Key Releases from the Asian Session

• The Bank of Japan left its benchmark interest rate unchanged, signalling that further rate hikes will depend on the stability of wage growth and the trajectory of core inflation.
• Japan’s industrial production rose above analysts’ expectations in September, limiting downward pressure on the yen.
• Australia’s retail sales in September came in line with market consensus, confirming subdued household spending amid the RBA’s restrictive interest rate policy.

Macroeconomic Calendar (CET)

• 07:30 France – Preliminary Q3 GDP, q/q. Consensus: 0.1%. Previous: 0.2%.
• 07:30 France – Preliminary Q3 GDP, y/y. Consensus: 0.8%. Previous: 1.0%.
• 08:00 Germany – Import Prices, y/y, September. Consensus: 10.3%. Previous: 8.3%.
• 08:00 Germany – Preliminary Q3 GDP, q/q. Consensus: -0.1%. Previous: -0.1%.
• 08:00 Germany – Preliminary Q3 GDP, y/y, seasonally adjusted. Consensus: -0.2%. Previous: 0.0%.
• 09:00 Spain – Preliminary Q3 GDP, q/q. Consensus: 0.6%. Previous: 0.8%.
• 09:00 Poland – BIEC Labour Market Indicator, October. Consensus: N/A. Previous: 68.4 pts.
• 09:30 Poland – Preliminary CPI Inflation, y/y, October. Consensus: 3.7%. Previous: 4.1%.
• 09:30 Poland – Preliminary CPI Inflation, m/m, October. Consensus: 0.2%. Previous: 0.1%.
• 10:00 Eurozone – Preliminary GDP, y/y, seasonally adjusted, Q3. Consensus: 1.1%. Previous: 1.2%.
• 10:00 Eurozone – Preliminary GDP, q/q, seasonally adjusted, Q3. Consensus: 0.2%. Previous: 0.2%.
• 11:00 Eurozone – Unemployment Rate, September. Consensus: 6.4%. Previous: 6.4%.
• 11:00 Italy – Preliminary Q3 GDP, q/q. Consensus: 0.1%. Previous: 0.2%.
• 14:00 Germany – Preliminary CPI Inflation, y/y, October. Consensus: 3.3%. Previous: 3.3%.
• 14:00 Germany – Preliminary CPI Inflation, m/m, October. Consensus: 0.2%. Previous: 0.0%.
• 14:00 Germany – Preliminary HICP Inflation, y/y, October. Consensus: 3.4%. Previous: 3.4%.
• 14:30 US – Employment Cost Index, q/q, Q3. Consensus: 0.9%. Previous: 0.9%.
• 14:45 US – Chicago PMI, October. Consensus: 47.1 pts. Previous: 46.6 pts.
• 15:00 US – University of Michigan Consumer Sentiment Index, final reading, October. Consensus: 69.0 pts. Previous: 68.9 pts.

Corporate Earnings Releases

• ExxonMobil – before market open
• Chevron – before market open
• AbbVie – before market open
• Regeneron Pharmaceuticals – before market open

3 Markets to Watch

1. EURUSD – The currency pair will be directly influenced by preliminary eurozone GDP figures and German inflation data, which will provide further insight into the pace of monetary easing by the ECB.
2. Crude Oil (Brent / WTI) – Oil prices remain above USD 110 per barrel due to the geopolitical risk premium associated with tensions in the Middle East. Earnings reports from oil majors ExxonMobil and Chevron will also help shape sentiment across the entire energy sector.
3. DE40 – Germany’s benchmark equity index will be testing local support levels in response to confirmation of recessionary GDP trends, as well as the preliminary German consumer inflation reading due in the afternoon.