ECB set to implement another rate hike, earnings from Europe's investment banks and the UK set to select their new leader.

European markets are set to open slightly lower today. The start of the week is expected to see another massive rate hike by the ECB (European Central Bank) and more quarterly earnings but from Europe’s major investment banks.

Another 75-basis point rate hike by the ECB on Thursday looks set in stone as the euro area inflation is at almost 10%. Well above the ECB’s target of 2%. Additionally, on Friday data showed that consumer confidence in the Eurozone stayed tight to a record low in October, underlining the continued risk of a recession this winter season as households try to survive the cost-of-living crisis.

However, economic data is due later in the trading session which comes in the form of PMI numbers for October. The data will demonstrate whether the euro area slipped further into contraction territory at the end of Q3.  

Over in the UK, the British Conservative Party is expected to choose a leader as their new prime minister. UK’s fifth prime minister in six years. Rishi Sunak, the former chancellor, is the front-runner after Boris Johnson, former PM, pulled out of the running late on Sunday.

Whoever the next prime minister may be, will inherit an economy on course for a recession. With rising interest rates and inflation over 10% leaving millions in the trenches.

Oil prices fell in the early hours of Monday after data highlighted that demand in China remained subdued in September, due to the continued Zero Covid policy. China imported 40.24 million tons of crude oil last month, approximately 9.79 million barrels per day, a week behind schedule. Up slightly from August but still below the 10 million barrels imported a day in the prior year.

Key Developments today:

Eurozone – PMI (9:00 AM GMT)

Britain – PMI (9:30 AM GMT)

U.S. – PMI (14:45 PM GMT)

(Sources: investing.com, reuters.com)