Markets lookahead: EU GDP and US CPI in focus after stormy week

The US election dominated market trends last week, investors will redirect their focus to economic fundamentals this week. The US Consumer Price Index (CPI) is poised to be a crucial data point influencing market sentiment.

In Europe, the second estimate of third-quarter GDP will offer further insights into the region’s economic trajectory.

Additionally, market participants will monitor a series of Chinese economic data releases to assess the effectiveness of the government’s stimulus measures in bolstering the world’s second-largest economy.

According to preliminary flash data from Eurostat, seasonally adjusted third-quarter GDP rose by 0.4% in the euro area from the previous quarter, an increase from 0.2% in the second quarter.

This marks the strongest growth rate in two years, with the German economy expanding by 0.2%, thus avoiding a recession. Growth was also recorded in France and Spain, indicating that lower interest rates and the forthcoming Paris Olympics may have contributed to economic growth.

The second GDP estimate is expected to align with the initial figure.

Meanwhile, Germany is set to release the ZEW Economic Sentiment Index for November, providing further insight into Europe’s largest economy.

Recent data has shown an improvement in the German economy in October, with business activity and factory orders both surpassing expectations.

The ZEW index rose to 13.1 in October from 3.6 in September due to anticipated lower interest rates. Consensus suggests that German economic sentiment will continue to recover, reaching 13.2.

However, the recent US election may potentially dampen business confidence. Germany will also publish the final Consumer Price Index (CPI) for October, which is likely to align with the