Tuesday's session brought Spanish and Italian Manufacturing PMI figures as well as German Unemployment Change and Eurozone Unemployment rate data. A pick-up in growth was recorded in the Spanish manufacturing sector during November, with output and new orders both increasing at faster rates. This encouraged greater purchasing activity and a buildup of inventories. Meanwhile, falling raw material costs continued to lead to reductions in both input prices and output charges. The seasonally adjusted Markit Spain Purchasing Managers’ Index rose to 53.1 in November from 51.3 in October, thereby signalling a solid and stronger improvement in the health of the sector. Analysts were anticipating incline to 51.9.

The Italian manufacturing sector continued to grow at a solid pace during November. Goods producers recorded the strongest rises in output, new orders and employment for four months, with the upturns underpinned by firmer demand in the domestic market as well as solid and accelerated growth in new export orders. Meanwhile, falling raw material costs led manufacturers to trim output charges for a third consecutive month. At 54.9, up from October’s 54.1, the headline Markit/ADACI Italy Manufacturing Purchasing Managers’ Index recorded its highest reading for three months. Analysts were predicting incline to 54.3

The euro area (EA19) seasonally-adjusted unemployment rate was 10.7% in October 2015, down from 10.8% in September 2015, and from 11.5% in October 2014. No change was expected.This is the lowest rate recorded in the euro area since January 2012. The EU28 unemployment rate was 9.3% in October 2015, stable compared to September 2015, and down from 10.1% in October 2014. This is the lowest rate recorded in the EU28 since September 2009.

Earlier today, German Unemployment Change figures were released. The jobless rate fell to 6.3% in November, the lowest level since German reunification, from 6.4% the previous month, data from the Federal Labor Agency in Nuremberg showed on Tuesday. The number of people out of work declined a seasonally adjusted 13,000 to 2.77 million. Economists predicted the rate would remain unchanged and the number of jobless would decline by 5,000.

On Wednesday Spanish Unemployment Change and Eurozone CPI data was released. The number of unemployed registered at the offices of the Public Employment Services in November decreased by 27,071 persons, 0.65% from the previous month. Decrease by 10,300 was expected. This is the sharpest decline in registered unemployment in November in all the historical series. In the past eight years, registered unemployment increased on average in the month of November in 52,340 people.

Euro area annual inflation is expected to be 0.1% in November 2015, stable compared with October 2015, according to a flash estimate from Eurostat. Analysts were anticipating increase to 0.2%. Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in November (1.5%, compared with 1.6% in October), followed by services (1.1%, compared with 1.3% in October), non-energy industrial goods (0.5%, compared with 0.6% in October) and energy (-7.3%, compared with -8.5% in October).

Thursday brought Spanish and Italian Services PMI data. A re-acceleration of growth was recorded in the Spanish service sector in November, with both business activity and new orders rising at the fastest rates in three months. Greater workloads encouraged companies to raise employment at a faster pace, while sentiment also improved. The headline seasonally adjusted Business Activity Index rose for the second month running in November, posting 56.7 from 55.9 in October. Analysts were predicting smaller incline to 56.2. This was the fastest expansion in activity since August.

Business activity in Italy’s service sector increased for a ninth straight month in November, with the rate of growth unchanged from the solid pace recorded in October, according to latest survey data. Furthermore, services firms noted the largest monthly gains in both new business and employment since April. The headline Markit/ADACI Business Activity Index recorded 53.4 unchanged from last month. Increase to 53.9 was expected.

However, the focus of the session was on ECB interest rate decision and the following Press Conference. The 25-member Governing Council, meeting in Frankfurt on Thursday, reduced the rate by 10 basis points to minus 0.3 percent. That’s in line with the move forecast by economists. Policy makers left the main refinancing rate and the marginal lending rate unchanged. On the following Press Conference, ECB President Mario Draghi said that the ECB extends the asset purchase programme to run until March 2017 or beyond if necessary and in any case until the Governing Council sees an improvement in inflation.

The ECB decided to reinvest the principal of assets bought under QE. It will also include local government bonds in QE. It also also announced it will continue conducting the MROs and 3-month LTROs as fixed rate procedures with full allotment as long as necessary.The prospects for growth are broadly unchanged since September, however ECB now sees HICP inflation at 0.1 per cent in 2015, 1 per cent in 2016 and 1.6 per cent in 2017. The outlook for HICP inflation has been revised downwards slightly.

This week markets will be looking at:

German Industrial Production (Monday 8:00)

French Industrial Production (Thursday 8:45)

Targeted LTRO (Friday 11:15)