ECB Cuts Rates Amid Global Inflation Reports

Today's market data is sparse, with expectations that the Federal Reserve Bank of New York's 1-year inflation expectations for September will remain stable. Attention should be paid to whether OPEC's monthly oil market report makes changes to its forecasts for crude oil demand and prices in response to recent fiscal and monetary policies of major economies. The U.S. stock market continues to focus on guidance from third-quarter earnings reports.

On Tuesday, the UK will release the latest employment data, with a focus on whether the unemployment rate has fallen for three consecutive months, allowing the Bank of England to maintain a wait-and-see stance on further interest rate cuts. At the same time, pay attention to the Eurozone and Germany's October ZEW economic sentiment index; if the data falls for four consecutive months, it will solidify the probability of the European Central Bank (ECB) continuing to cut interest rates this Thursday.

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On Wednesday, the UK will release September CPI and PPI figures. The previous figures showed inflation remaining slightly above the Bank of England's 2% target, indicating that there is no immediate pressure for the Bank of England to follow up with more rate cuts, but it leaves room for further rate cuts later this year. Combined with the previous day's UK employment data, the market will have a clearer judgment on the Bank of England's next move.

Thursday brings the highlight of the week, with the ECB set to announce its interest rate decision. It is highly likely that the interest rate will be lowered by 25 basis points, in line with previous statements by more central bank officials supporting continued rate cuts, including ECB President Christine Lagarde, who has hinted at a rate cut this month. Therefore, this adjustment in interest rates should not come as a surprise to the market, unless the ECB suggests that there will be more rate cuts to follow.

In terms of evening data, U.S. September retail sales may reflect improvements in some recent economic data. Against the backdrop of accelerating inflation, a recovery in consumer confidence will be reflected in increased spending. If the data remains positive, it can enhance the market's optimism for a soft economic landing this year, particularly benefiting the U.S. dollar and U.S. stocks.

On Friday, in the Asian market, attention can be paid to the release of Japan's September CPI. The core CPI has been rising year-on-year for 36 consecutive months, far exceeding the Bank of Japan's 2% inflation target. Therefore, the market has been preparing for the next rate hike by the Bank of Japan, with the current expectation being that the possible timing for the rate hike could be in December.