In the US focus will be on the mid-term election. The Republicans are expected to beable to gain the six seats needed in the Senate to ensure that they will gain control ofthe Senate. The Republicans already hold a sizable majority in the House. However,the Republicans are unlikely to secure a two-third super-majority that will allow theCongress to overrule a veto from President Obama. Hence, it will continue to be adivided government. The mid-term election is unlikely to be a major game changerand the market impact is expected to be modest. Worst case outcome is probably ifuncertainty is extended and a later second run-off election will be needed in a decisivestate like Georgia, because none of the candidates got more than the required 50% inthe first round of elections.
The European Commission will release revised macroeconomic forecasts for itsmember countries. In general we expect the Commission to revise its growth forecastlower relative to its latest forecast from May. In particular attention will be paid to theCommission’s forecast for public deficits.
ECB board members Coeure (8:40 CET) and Costa (10:00 CET) are both scheduledto speak today. However, they will probably be careful not to impact marketexpectations ahead of Thursday’s ECB meeting.
Riksbank deputy Governor Martin Flodén speaks and Danmarks Nationalbank isscheduled to publish October’s currency reserve figures.
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