The euro zone is expected to release its flash inflation data for November Tuesday. Consumer price inflation surged to a 13-year high of 4.1% in October. It is expected to stay well above the ECB’s 2% target into next year. Germany, Spain, and France are expected to release CPI figures on Monday and Tuesday.
With the threat of inflation, ECB will have to tighten its monetary policy. Besides the new variant that emerged for coronavirus is posing another cautious approach for policymakers when it comes to the issue of ending the stimulus.
European Central Bank policymakers expect the central bank to raise its short-term inflation forecasts next month.
The ECB is likely to raise its 2022 inflation forecast at its upcoming December meeting. Some experts believe that the ECB is likely to wind up it asset purchase program in March. It might step up its its bond purchase program to offset the cut to stimiulus.
Meanwhile, the global stock markets rallied Monday following the battering they faced Friday.
The Dow Jones Industrial Average rose 236.6 points, or 0.68%, to 35,135.94; the S&P 500 gained 60.61 points, or 1.32%, at 4,655.23; and the Nasdaq Composite added 291.18 points, or 1.88%, at 15,782.83.
The pan-European STOXX 600 ended up 0.7%, logging its best day in a month and recovering some of Friday’s 3.7% slump triggered by concerns around the newly discovered variant.
MSCI’s gauge of stocks across the globe gained 0.67%.
Omicron, detected in South Africa last week, has been found as far as Canada and Australia.
Oil prices rallied, after plunging more than 10% on Friday in their biggest one-day drop since April 2020.
Speculation that OPEC and its allies, known as OPEC+, may pause an output increase in response to the spread of Omicron aided the oil price rebound.