The ECB will be in focus in the session ahead
The plunge in stocks yesterday kept the dollar and yen underpinned for the most part, though we are seeing some retracement to the moves to start the day.
European equities in particular looked ugly, but the S&P 500 also closed below its 100-day moving average for the first time since May. While US futures are pointing to a 34-point gain for now, the key level @ 3,306.05 will be one to watch later today.
After the sharp moves yesterday in the equities space, a bit of a breather may be warranted but it is tough to see the overall mood shift unless dip buyers can reflect better technical sentiment ahead of the weekend.
The risks associated to the US election may also prove to be a hindrance, alongside month-end flows so there's that to consider over the next few sessions as well.
Looking ahead today, economic data will once again prove to be of little importance though we do have the ECB coming up so that will be something to watch out for.
0800 GMT - Spain October preliminary CPI figures
Prior release can be found here. Spanish inflation is expected to keep more subdued and with similar sentiment across the region, it should pile on more pressure on the ECB towards the year-end to address the threat of inflation expectations de-anchoring.
0855 GMT - Germany October unemployment change, rate
Prior release can be found here. Labour market conditions - or at least the data - are expected to reflect more steadiness once again this month, though a lot of the underlying weakness has been masked by the government furlough program. So, it is tough to really extrapolate too much from the readings here.
0930 GMT - UK September mortgage approvals, credit data
Prior release can be found here. Credit conditions continue to look extremely subdued in the wake of the crisis and barring any improvements in this space moving forward, it will prove to be a long-term impediment for the UK economy to sustain any recovery.
1000 GMT - Eurozone October final consumer confidence
1000 GMT - Eurozone October economic, industrial, services confidence
Prior release can be found here. After months of improving morale, the resurgence in virus cases is expected to dampen economic confidence this month. That just reaffirms waning optimism surrounding the economy in Q4.
1245 GMT - ECB announces its October monetary policy decision
The September decision can be found here. The ECB isn't expected to announce changes to policy today, though the latest developments in Germany and France means that any urgent action should not be ruled out. The central bank is largely expected to expand its PEPP stimulus next month, so bringing that forward is certainly a consideration. However, that may well have a limited impact on the euro as highlighted here. After the decision, just watch out for the tone from Lagarde's press conference at 1330 GMT.
1300 GMT - Germany October preliminary CPI figures
Prior release can be found here. Expectation is for German inflation to keep more subdued, with estimates looking for a -0.3% y/y headline reading. The state readings in the lead up to the national reading here will detail more of what to expect but all in all, it should reflect softer inflation pressures in general this month.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
