The ECB and its President Mario Draghi took center stage yesterday. Draghi once again did not disappoint, surprising markets with a vast package of measures to resurrect Europe’s economy. Draghi cut its main interest rates and expanded its bond buying program. However, the Euro appreciated drastically across the board as a bout of Euro strength occurred during the afternoon after hawkish comments from the ECB President.
ECB President Mario Draghi said the outlook for economic growth in the Eurozone had been revised slightly lower, mainly reflecting the weakened outlook for the world economy, however, he added that he did not anticipate the need to reduce rates further. The comments lead to Euro strength as the relatively hawkish comment hit the wires. The ECB cut its benchmark interest rate by five basis points to 0% and increased its monthly purchases to €80bn in order to combat low inflation and the Eurozone’s current poor economic performance.
The week ends with the only piece of data to watch coming out of the UK is the Trade balance. The gauge is expected to show more goods imported than expected for February, the figure is due to drop to -10.3B but with the weaker Pound seen coming from the Brexit concerns this could help with cheaper goods being exported from the UK.