ECB Monetary Policy Meeting Accounts to be Released Today

The main economic event today will be the publication of the ECB Monetary Policy Meeting Accounts, which will give an insight into the thinking of the ECB on economic conditions that influence their decisions. The reaction to the data events over the past couple of months will be of particular interest. Syria dominated headlines overnight, as Nato members prepare for strikes against the country. There were reports of British Subs moving to the Eastern Mediterranean and Italian fighter jets seen in the same area. Commercial airlines have ceased flights in the region, particularly to Lebanon, which is on the route from the Med to Syria that sub-launched cruise missiles would fly over. There was also a report that UK PM May would seek cabinet approval to strike. Trade tensions between the US and China increased, as the Chinese Ministry of Commerce said that they would fight back without hesitation if the US escalates tariffs. They hope that the US will understand the world situation and not blindly walk down its own path. It said that US actions so far were typical trade protectionism and unilateralism. It said that China will carry out measures announced by President Xi in regard to opening up the country to trade and investment. UK Industrial Production (YoY) (Feb) was 2.2% v an expected 2.9%, against a previous 1.6%, which was revised down to 1.2%. Industrial Production (MoM) (Feb) was 0.1% v an expected 0.4%, against 1.3% previously. Seasonally, there is generally a downturn in this figure, with a drop early in the New Year, something which can be seen in the February reading, with a strong rebound expected in March. As was the case last month, the reading came in lower than expected. The downward revision for the yearly figure is also a worry. Manufacturing Production (YoY) (Feb) was 2.5% v an expected 3.3%, against 2.7% previously, which was revised down to 2.2%. Manufacturing Production (MoM) (Feb) was -0.2% v an expected 0.2%, against 0.1% previously, which was revised down to 0.0%. This figure fell below the 0% level, matching the July number of -0.2%. Both monthly and yearly figures were revised down and the traders will await this data next time out to see if this downward trend accelerates. EURGBP moved higher from 0.87013 to 0.87243 because of this data release. ECB President Draghi spoke at the Generation Euro Students’ Award Ceremony, in Frankfurt. Some of the comments made were: more integration allows the EU to face the economy’s challenges. The EU can’t solve its problems just at national levels. Wages and inflation will rise as the economy improves and there is confidence that inflation will rise to the ECB’s goal. The direct impact of the US trade tariffs announcement has not been big, the key issue is retaliation. The confidence effect of the trade spat can be very important. US Consumer Price Index (YoY) (Mar) came in as expected at 2.4% against 2.2% previously. Consumer Price Index Ex-Food & Energy (YoY) (Mar) also …