Week ahead in the markets: Tensions in the Middle East remain in focus

This week, risk-off sentiment is likely to continue driving global market movements, as geopolitical tensions in the Middle East escalate further. The developments in this region will take centre stage.

Additionally, the US is scheduled to release its September inflation data, which the Federal Reserve (Fed) closely monitors to adjust its monetary policy.

Both the ECB and the Fed will release their September meeting minutes, providing deeper insight into the stances of these central banks.

Economic data for the eurozone is expected to be light this week, meaning that external factors will likely influence market movements more significantly.

The ECB’s September meeting minutes will be the most important market event, as they may provide indications of how quickly the central bank will continue reducing interest rates.

Following two 0.25% rate cuts in June and September, analysts expect the ECB to cut rates again in October, with inflation cooling more than anticipated in September.

Other economic indicators this week include the Eurozone’s retail sales, Germany’s industrial production, and France’s trade balance for August, though these are expected to have a limited impact on European stocks and the euro.

In the UK, the monthly Gross Domestic Product (GDP) data for August will be a key focus.

The British economy stalled for the second month in a row in July, suggesting that the momentum seen in the first half of the year may be fading. A slowdown in growth could push the Bank of England to accelerate its easing cycle.

The US monthly Consumer Price Index (CPI) for September is expected to be a critical data point for global markets this week. It will be the first inflation release since the Fed’s large 0.5% rate cut in