Private sector output in Germany expanded at a slower pace than expected in October, dampening optimism over the health of the euro zone's largest economy, preliminary data showed on Tuesday. Market research group Markit said that its Flash German Composite Output Index, which measures the combined output of both the manufacturing and service sectors fell from 57.7 in September to 56.9 in October, missing forecasts for 57.5. The preliminary German manufacturing purchasing managers’ index dipped to 60.5 this month from a final reading of 60.6 in September. Analysts had expected the index to slip to 60.2 in October. The flash services purchasing managers’ index declined to 55.2 this month from 55.6 in September, below expectations for a reading of 55.5.

Focus of Wednesday's session was on German Business Climate figures. A euphoric mood among German constructors and manufacturers drove business confidence to an all-time high in October, a survey showed, reflecting optimism that an upswing in Europe’s largest economy has further to run. The Munich-based Ifo economic institute said on Wednesday its business climate index, based on a monthly survey of some 7,000 firms, rose to 116.7 from an upwardly revised 115.3 in September. Ifo said a continuing recovery in the euro zone was helping German exporters feel more positive.

Thursday's session was marked by ECB interest rate decision and the following press conference. After the European Central Bank (ECB) announced its decision to cut its monthly asset purchases (APP) in half, starting in January, and extend them for another 9 months from the initial deadline at the end of this year, the president of the monetary authority, Mario Draghi, gave an upbeat vision of the euro zone economy but insisted that further quantitative easing was needed in order to reach the ECB inflation target.

In the announcement released 45 minutes ahead of Draghi’s appearance, the ECB said that it will begin to reduce monthly purchases in January from the current €60 billion ($70.6 billion) to €30 billion ($35.3 billion) and will extend those purchases to “the end of September 2018, or beyond, if necessary”. It added that it will “reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary.”

This week markets will be looking at:

Spanish Flash CPI (Monday 9:00)

Spanish Flash GDP (Monday 9:00)

CPI Flash Estimate (Tuesday 11:00)

Prelim Flash GDP (Tuesday 11:00)

Spanish Manufacturing PMI (Thursday 9:15)

Spanish Unemployment Change (Friday)