The week ahead: ECB and Q3 US GDP

ECB expected to maintain rates ay 4.0%

By Nadia Elbilassy | @Nadia Elbilassy | 23 October 2023

Market open
  • Expectations for US GDP growth are at 4.3%, Supposedly driven by robust gains in consumption following positive retail sales, industrial output, and business inventory reports.

  • The ECB is likely to keep interest rates steady at 4.0% during its upcoming meeting, given the fragile economic outlook and declining inflation.

  • Market focus will be on ECB President Christine Lagarde's statements regarding the impact of rising global bond yields on the euro zone's monetary policy.

Market watch for the week!


GDP figures may be more bullish than expected as expectations are set at 4.3% versus 2.1 previous (after an upward revision). The strong expectation is led by strong gains in consumption as retail sales, industrial output, and business inventories from last week all exceeded expectations, indicating robust economic performance.

Another point to add is, if that’s the case this would mark the largest rise in US output since Q4 2021.

Lagarde’s statements awaited

The ECB meets later this week and is expected to leave interest rates unchanged at 4%. Market participants will be closely monitoring ECB President Christine Lagarde statements regarding the potential impact of the recent increase in global bond yields on the euro zone's monetary policy outlook.

Its likely to see the ECB keep the current rates at 4.0%. As the economic outlook remains fragile and inflation has indeed declined.

The euro rose by 0.47% to 1.0602. Whilst the dollar index continued to trade in the bearish territory after a decline of nearly 0.5% last week, marking its most substantial weekly loss in three months. It remains down for the month up to this point.