ECB meeting

The European Central Bank (ECB) is holding its monthly policy meeting on Thursday. Discussions about how long the rise in inflation in the Euro Zone will last and whether the bank will fine-tune monetary policy as a result are the focus of the meeting.

At its last meeting in September, ECB policymakers delayed its bond-buying decision until December, but since then Eurozone inflation has soared to a 13-year high amid supply bottlenecks and rising energy prices.

ECB chief Christine Legarde, who will speak after the meeting, will provide investors with clues about the decision to cut back on bond purchases expected in December.

Unemployment and inflation in Germany will also be watched on Thursday, with GDP figures on Friday. In addition, other major economies of the region publish their growth figures.

US GDP

On Thursday, markets will be watching how much the US economy has grown in the last quarter. Economists forecast US GDP’s growth to have slowed to 2.8% from 6.7% in the previous three months.

With the impact of the Delta variant, rising prices, supply chain challenges and labor shortages, the recovery from the pandemic has slowed in the world’s largest economy, but these effects are expected to dissipate in the fourth quarter.

Other economic data to watch from the US throughout the week includes durable goods orders on Wednesday, initial unemployment claims on Thursday, personal income and spending on Friday, as well as the Fed’s favourite inflation gauge, the core personal consumption expenditure price index (PCE).

These economic data come ahead of the Federal Reserve’s monthly meeting next week, on November 2–3. The Fed is expected to announce its plans to begin tapering in asset purchases.

BOJ meeting

The Bank of Japan (BoJ) is holding its monetary policy meeting on Thursday. The bank is set to maintain its supportive policy, no change in interest rates expected.

Sources close to the bank told Reuters last week that some monetary policy officials are discussing phasing out the COVID-19 lending program if infections in the country continue to subside. A decision on this is not expected until December, however.

US legislative process

In the US, the ongoing disagreements among Democrats over President Biden’s economic agenda intensifies this week.

The party leadership and the White House continue negotiations with Senators Joe Manchin and Kyrsten Sinema, known for their economic conservative positions in the party, on the social spending package and the timing of a vote on the bipartisan infrastructure package.

House Speaker Pelosi said on Monday she hopes for a deal this week. President Biden said the meeting with senators over the weekend went well.