Click here to read the Weekly Digest with commentary from our Head of Research, John Haynes, on the ongoing Chinese Party Congress.
Over the weekend, we have had a masterclass from Japan’s Prime Minister on how to successfully call and, crucially, win a snap election. Abe’s Liberal Democratic Party and their coalition partner have won 313 seats out of the 465 in the lower house, retaining their comfortable majority. If Abe completes the full three year-term, and surely he would like to with the Tokyo Olympics in 2020, he will become Japan’s longest serving PM. His priorities for the next three years are likely to be focused on continuing economic reform and a stronger vision for Japan’s military in light of increased political tensions in the region.
This week it is all eyes on the ECB (European Central Bank) meeting on Thursday, which is expected to see a tapering of Quantitative Easing from the current €60bn / month of purchases down to what the market expects to be €20bn – €30bn / month, possibly starting in January. There is unlikely to be any concurrent talk of tightening rates, the ECB still keen to stimulate a bit of inflation which a stronger € would not help.
In Spain, neither side is prepared to blink on the issue of Catalan independence, Rajoy has invoked Article 155 which would see Madrid temporarily take control of the Catalan region ahead of fresh elections in the region, with the Catalan Parliament scheduled to meet today to discuss their next move.
There is a raft of company releases this week, including Visa, Coca-Cola, GlaxoSmithKline, Celgene, Alphabet, Microsoft, Amazon, Barclays and Shire.