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Markets are taking a breath after the quick recovery in early October.

The earnings reporting season had a satisfying start. About one-third of the major companies in the US and Europe have reported so far. In both regions they met sales expectations on average and bet earnings expectations slightly which means still a decline of earnings by about 6%!

China GDP growth has been reported at 6.9% versus last year which is also above expectations, however marks a historic low and raises questions of overstatement by Chinese authorities. Good news from Europe: Spanish unemployment finally fell below 5 million which is a sign of European recovery although this level is still twice the amount before financial crisis. Compare to German unemployment rate at record low in our chart of the day.

So overall economic activity is fairly stable. The US is doing good, China is slowing down and Europe has a some recovery potential. The ECB is expected to extend its bond buying program in the fact of threatening deflation.

Erwin Lasshofer and his INNOVATIS still do not expect rate hikes any time soon. US inflation is low, the US dollar is strong and the rest of the world rather slow.