Contrasting sharply with expectations, the latest European Central Bank’s announcement was more dovish than forecast. Under President Mario Draghi’s watch, the Central Bank would not repeat its mistake from 2008 when it lifted interest rates. The other big news over the week was the US economy unexpectedly maintaining a brisk pace of growth, expanding at a 3.00% annualized pace during the third quarter. Federal Reserve Chair Janet Yellen had cautioned last month that third quarter growth could be “held down" by the severe disruptions caused by the hurricanes Harvey and Irma. On the political front, the conclusion of the week-long Chinese Communist Party Congress saw the election of Xi Jinping as President for a second term.
However, the spotlight was on the historic decision to incorporate “Xi Jinping Thought” into the party constitution, making Xi the first living leader since Chairman Mao to be conferred such an honour. In Japan, Prime Minister Shinzo Abe secured an overwhelming mandate in last weekend’s general election, paving the way for a fresh push to amend the country’s pacifist constitution. In other news from the Euro Zone, the German Ifo Business Climate Index touched a record high last week. However, improved sentiment comes amid the uncertain backdrop of the Catalan referendum and the final make-up of Angela Merkel’s ruling coalition.