Early forecasts by economists call for a soft recovery of just 0.1% growth in Q3. At the same time, markets are looking ahead to potential landmark announcements from the European Central Bank (ECB) and the U.S. Federal Reserve. It goes without saying that the next few days will be critical for economic interests on both sides of the Atlantic. On the data front, tomorrow brings preliminary GDP figures and the ECB monetary policy decision.
Germany’s enormous stimulus package of €130 billion ($150 billion) has $130 billion to jumpstart its economy, but the results aren’t coming in as expected. Analysts are closely monitoring the situation as they assess whether this fiscal intervention will provide the necessary momentum for growth. The absence of demonstrated immediate results from this massive statewide initiative begs some profound questions. Nonetheless, it calls into question the effectiveness of the initiative and raises further questions on estado of the European economy.
The advance release of third quarter GDP numbers will provide a clearer look at economic conditions within the Eurozone. This data will be crucial as it falls justo before the ECB’s policy decision announcement. Market participants will be keenly interested in how these data points influence the ECB’s stance on interest rates and monetary policy.
There is a lot of attention being paid to trading in the EUR/USD currency pair. They surely hope that its performance will be guided by the Federal Reserve’s announcement today. The Fed’s pronouncements on interest rates and the broader economic outlook can have a powerful sway over investor sentiment. This, in turn, affects currency trading across all global markets.