Draghi strengthens Euro

Yesterday’s markets

21st October 2016

  • GBP Retail Sales m/m: 0.0%
  • GRP MPC Member Shafik Speak
  • EUR ECB Press Conference
  • EUR Minimum Bid Rate: 0.00%
  • USD Unemployment Claims: 260K
  • USD Philly Fed Manufacturing Index: 9.7

Yesterday, Draghi the ECB President announced the central bank’s latest monetary policy decision followed by a Draghi led press conference. Before the event, markets were looking for a confirmation that the ECB will extend its asset purchasing programme beyond March next year. Although these hopes were squandered as Draghi stated that the matter was not even discussed at the latest meeting. Draghi also mentioned that an abrupt ending to bond purchases is unlikely and was not discussed. Monetary policy was also left unchanged. The Euro strengthened drastically against the Greenback and the Pound during the conference before moving lower to the pre-conference levels. 

Yesterday. the economic docket was filled with high tier data from both the UK and US. Firstly, The UK retail sales released in the morning failed to meet market expectations as the retail sales for September was posted at 0%, missing the expectations of 0.3% as clothing sales and food sales dropped due to the unusual warmer weather seen last month. This weakened the pound during yesterday’s European session. In the afternoon, the US released the Philly Fed Manufacturing Index and unemployment claims. The data was mixed, with the weekly jobless claims missing forecasts and the Philly Fed posting its third consecutive better than expected reading.

Today’s markets

20th October 2016

  • GBP Public Sector Net Borrowing
  • EUR EU Economic Summi
  • CAD Core CPI m/m
  • CAD Core Retail Sales m/m
  • CAD CPI m/m
  • CAD Retail Sales m/m

The week ends on a tame note with no high tier data scheduled to release. The only news to note comes from the UK who release the Public Sector Net Borrowing figure. Expectations for the budget surplus are to depreciate to 8.6bn, down from the 10.1bn.