ECB’s Klaas Knot: “Another Interest Rate Step in October”

Today the U.S. market is closed for observing Columbus Day. Later this week, investors will be vigilant about the developments around the Federal Open Market Committee (FOMC), which is expected to announce whether and how much it will raise interest rates.

On Friday, vital data showed September nonfarm payrolls increased by 263,000 (against consensus of 250,000). The 3-month average for total nonfarm payrolls, as a result, slid to 372,000 from a revised 382,000 in August. Also, September private sector payrolls increased by 288,000 (against consensus of 275,000). August private sector payrolls revised down to 275,000 from 308,000.

Meanwhile, today European stock markets are trading mostly lower ahead of this week's key economic data and with earnings season in focus. On the macro side, investors will get fresh data on inflation in Germany, as well as EU industrial production, and UK GDP, among others.

The Bank of England announced additional steps today to support the financial sector amid the completion of all bond purchases from October 14. Earlier today, European Central Bank Governing Council Member Klaas Knot said that the ECB would be compelled to take another "significant interest rate step" in October, although he did not speculate about the size of the expected hike. He added that other "significant moves" are in the play in 2023, necessary to bring inflation back to target.

At 1:20 p.m. CET, the German DAX is edging modestly higher by 0.52%, with Adidas (ADS.DE) up by 1.71%. The French CAC 40, however, is falling 0.37%, while Kering (KER.PA) dropped by 1.38%. In its turn, the British FTSE 100 declined by 0.36%, as Centrica (CNA.L) dropped by 2.2%.

On Fx front, the euro and the pound are down by 0.42% and 0.34% against the dollar at 1:25 p.m. CET, selling for $0.9699 and $1.10568, respectively.

Corporatewise in the region, BMW (BMW.DE) said that Q3 sales were primarily affected by turbulence in geopolitics and supply constraints. In the same period, sales decreased by 0.9% compared to Q3 2021, with 587,795 vehicles sold. The German carmaker also announced that the company delivered 1,747,889 BMW, MINI, and Rolls-Royce vehicles to clients between January and September. Meanwhile, "in the month of September, BMW Group sales were up 6.6%, with 210,543 vehicles delivered to customers." In the case of fully-electric BMW and MINI cars in the first 9 months of 2022, the group sold 128,196, up 114.8% annually. Finally, BMW confirmed its guidance for the full year 2022, "with sales slightly below the previous year."

Earlier this morning, major stock market indexes in the Asia-Pacific region traded lower ahead of a series of key macro reports to be released later in the week about the state of the region's production. The reports will include the ones on China's consumer and producer prices.

In continental China, the Shanghai Composite declined by 1.66% at the close, while the Shenzhen Composite dropped by 2.38%. In Hong Kong, the Hang Seng plunged by 2.95% for the day. Australia's S&P/ASX 200 decreased by 1.40% for the day. Japan's Nikkei 225 and South Korea's Kospi were closed for the day due to holidays.