Although the ECB notes that there is no rush to expand QE, more stimulus is highly likely to arrive by the end of the year.

Rent4 | Futures point to a higher start of session (Eurostoxx futures + 0.7%, flat S&P futures) on a day when volatility could increase due to the expiration of derivatives.

The most relevant macro data of the day will come from the United States, where we will have the first consumer survey October (University of Michigan) with expectations of stability after the latest falls. Also, pay attention to the data for September retail sales and industrial production to gauge the current situation of the American economy, all after a bad unemployment data weekly published yesterday that highlights the need for new fiscal stimuli. Nor does it seem that it will arrive more monetary stimulus in Europe at least imminently, following the ECB’s statements yesterday that no rush to expand QE, at least in this month’s meeting (29-October), although we still think that it is highly probable that more stimulus arrives at the end of the year if the situation persists or worsens, with negative evolution of activity, disinflationary pressures and appreciation of the Euro. In this context, 10-year IRR Germany falls to -0.61% and there is some widening in peripheral spreads (up to 76 bp Spain and 131 bp Italy).

As for the Brexit negotiations, as might be expected, after the deadline set by Boris Johnson expired, the talks will probably continue until at least the end of the month or the beginning of November and we await the statements of the British Prime Minister after the end of the European Council held yesterday and today in Brussels, where in all probability the European leaders they will give the green light to Michel Barnier to continue with the negotiations despite slow progress. Likewise, a political impetus on the part of Johnson after the disagreement caused by the internal markets law that helps to bring together positions, especially regarding state aid, access to the European fishing fleet in British waters and the system of governance and dispute resolution.

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