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Draghi Day

  • UK Public Sector Net Borrowing: 8.6B
  • BoC Monetray Policy Report
  • BoC Rate Statement
  • CAD Overnight Rate: 0.50%
  • US Crude Oil Inventories: 8.0M
  • BoC Press Conference
  • BoE Gov Carney Speaks

Today is arguably the biggest event of the week; the ECB press conference and rate decision. The benchmark rate is forecast to remain at record lows of 0.05%. However, the press conference should provide us with some Euro volatility. Markets will be awaiting for any clues from Draghi on whether the continued low inflation will warrant further easing plans. Investors are expecting the ECB President to continue his dovish tone and play down the recovery signs of late. On the hawkish side, yesterday’s bank lending survey suggested that the central bank’s Quantitative Easing measure is having a positive effect and this could be highlighted in today’s talk.

Meanwhile, UK public sector borrowing narrowed yesterday to 8.6 billion, its smallest deficit since 2007. The figure helped Sterling re-coup the previous night’s losses and push GBPUSD higher. However, the better than expected reading may still not be enough for Chancellor of the Exchequer George Osborne to reach his borrowing targets.

  • MPC Member Cunliffe Speaks
  • UK Retail Sales m/m
  • EUR Minimum Bid Rate
  • CAD Core Retail Sales m/m
  • CAD Retail Sales m/m
  • ECB Press Conference
  • US Unemployment Claims

Probably the busiest day in the market this week. Starting in the UK we have the release of the retail sales numbers which is expected to remain fairly low. The main focus will be the ECB meeting. We are not expecting any announcement of an extension of the QE programme but believe that Draghi will remain dovish in his tone. Finally the weekly release of the jobless claims are due as well.