Things to Watch This Week: Interest Rate Decisions, GDP ...

Global financial markets will focus on this week's European Central Bank meeting for further details on how the central bank plans to taper its massive economic stimulus program, U.K. and U.S. GDP, apanese inflation data and monetary policy announcement from the Bank of Canada.

UK Preliminary Q3 GDP. The Office for National Statistics is to produce preliminary data on U.K. economic growth for the third quarter at 0830GMT (4:30AM ET) on Wednesday. The report is forecast to reveal the economy grew 0.3% in the three months ended September 30, after expanding at the same rate in the previous three-month period. On an annualized rate, the British economy is expected to grow 1.4% in the third quarter, slowing from growth of 1.5% in the preceding quarter. Recent data has painted a subdued picture of the economy just as the BoE prepares to raise interest rates for the first time in a decade. The UK central bank said in September that it was likely to raise borrowing costs in the months ahead if the economy and price pressures kept growing.

BoC Rate Decision. The Bank of Canada's interest rate decision is due at 10:00AM ET (1400GMT) on Wednesday, with most experts expecting the central bank to hold its benchmark rate at 1.0%.
The BOC surprised many by hiking rates for the second consecutive time at its previous meeting in September. Market odds of no move at this week's meeting rose to 81% from 73% after data on Friday showed that retail sales unexpectedly fell in August, pointing to a slowdown in growth after a hot first half of the year. Still, many are betting the central bank will have room to hike again in December, with market odds at around 50%.

European Central Bank Policy Meeting. ECB's latest interest rate decision is due at 1145GMT (7:45AM ET) on Thursday, with no major policy changes expected. Most of the focus will be on President Mario Draghi's press conference 45 minutes after the announcement, as investors look for more clues on when and how the ECB could start unwinding its monthly quantitative easing program. Market experts believe the ECB will announce that it will start trimming its monthly asset purchases to €40 billion from the current €60 billion beginning in January. They were mostly split on whether the program would last six or nine more months after that. Sources close to the ECB's pre-meeting discussions say the a nine-month extension seems likely with debate over monthly volumes between €25-and-€40 billion a month.

Japan Inflation Data. Japan's Statistics Bureau will publish October inflation figures at 2330GMT Thursday (7:30PM ET). Market analysts expect the headline figure to remain positive, rising 0.8% year-on-year, which would be the ninth straight month of annual increases. But the modest year-on-year increase will be well off the Bank of Japan's target and keep the central bank under pressure to maintain its massive monetary stimulus.

U.S. Advanced 3rd quarter GDP. The U.S. is to release preliminary figures on third-quarter economic growth at 8:30AM ET (1230GMT) Friday. The report is expected to show growth slowing to an annual rate of 2.6% from 3.1%, with a decline in retail sales, industrial production, homebuilding and home sales blamed on Hurricanes Harvey and Irma. Interest rate futures are pricing in around a 90% chance of a December Fed rate hike.

Trader-G.Bozhidarov

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