It was a hectic day in the markets yesterday as the UK released a bullish retail sales figure and President Draghi stunned economist’s everywhere. Firstly, UK retail sales posted its best reading since January 2014 at 1.9% against a forecast 0.4%. The better than expected number was driven higher by strong food and drink sales which can be linked to England hosting the Rugby World Cup. The bullish retail sales data over Q3 is forecast to add 0.1% growth to the overall growth rate this year. After this release we saw GBPUSD & GBPEUR reach monthly highs, before retracing after Mario Draghi addressed the market later that afternoon.
ECB President Mario Draghi said yesterday that he and the Central Bank will investigate stimulus measures to boost the economy in December, with an option to further reduce the deposit rate. The Euro depreciated during the comments as Draghi hinted at fresh stimulus measures potentially before the year end. The ECB President’s dovish tone sunk the Euro against the majority of its major counterparts yesterday afternoon.
Eurozone data will be today’s focus following on from yesterday’s ECB Meeting. Due to hit the wires are the PMI services and manufacturing from the Eurozone and Germany. It will be interesting to see if the fallout from Volkswagen will have any effect.