QE starts in the Eurozone

Yesterday’s markets

10th March 2015

  • Eurogroup Meetings
  • USD CB Consumer Sentiment
  • CNY CPI y/y: 1.4%

The beginning of this week saw the European Central Bank kick-start their 18 month quantitative easing program. The ECB started purchasing sovereign bonds yesterday with the aim to reach 60 billion Euros a month until September next year, in an attempt to revive the bloc’s economy.  Greece again is still very much a concern for the Euro zone, as their provisional agreement on its proposals with its creditors have fallen short. The list of measures sent by Athens to the Euro region ministers last Friday are far from complete, which is now building further pressure of Greece running out of cash by the end of this month.  Again raising the question of a “Grexit”.

Overnight China, the world’s second largest economy posted its yearly inflation figure.  Expectations were for prices to rise upto 1% from 0.8% and the reading did not disappoint. Chinese CPI posted a much better 1.4%, leading markets to believe that the Chinese economy is a favourable environment for the People’s Bank of China to increase their current stimulus measures. The PBOC have lowered interest rates already last month to encourage economic growth. GDP for 2014 was the slowest for a quarter of a century, this years growth outlook is forecast for 7% which will be felt around the world as their demand for commodities will diminish further.

 

Today’s markets

9th March 2015

  • ECOFIN Meetings
  • US Jolts Job Openings
  • BoE Gov Carney Speaks
  • MPC Member Speaks

On today’s docket, firstly from the U.S. the Jolts job openings will be posted and market consensus is for new jobs to increase slightly to 5.04m proving further strength in the U.S. labour market.  At 2.35pm the governor of the BOE Mark Carney will be speaking at an economic affairs committee where any insight given on interest rates will inject volatility into the Pound.