ECB to act in December

The euro and the pound have both lost ground to the dollar, falling to below $1.17 and to around $1.29 against the US currency respectively and leaving the euro-sterling rate yet again largely unchanged at about 90.5p. Equity markets put in something of a mixed performance yesterday with European stocks flat to slightly lower but US indices managing to close in positive territory, while in core bond markets German 10-year yields were steady but equivalent US yields nudged up on the day

The ECB remained on hold following yesterday’s meeting but Christine Lagarde said the central bank will act at its next meeting in December – with all policy options on the table – as the economic recovery “loses momentum” amid a renewed rise in COVID-19 cases and associated restrictions with the risks to the outlook clearly on the downside

According to reports, German Chancellor Angela Merkel has told fellow EU-27 leaders that they all failed to step in quickly enough to control the current wave of the pandemic by imposing restrictions earlier, adding that they would have to draw lessons from the situation and act faster in the future

The US economy rebounded quite strongly in the third quarter after plummeting in the second quarter, with GDP increasing by almost 7.5% following a fall of 9% in Q2

The annual rate of house price inflation in the UK accelerated again in October, to 5.8%, as the temporary stamp duty holiday announced recently boosts activity in the market

Data due today includes third quarter GDP, CPI inflation and unemployment in the Euro Area, as well as consumer spending and PCE inflation in the US