Main points for Today • All eyes on the ECB policy meeting • ECB members emphasized recently that the door remains open for further easing measures but it’s too early to talk about extending QE beyond September 2016. • ECB’s Draghi could communicate again that they are willing and ready to act if needed. • In our view, we could see more dovish rhetoric even a promise of an expansion of the current program, either the size or the horizon, but no action yet. We will be looking for hints that further policy accommodation could be introduced at Dec. meeting. In such case, EUR could weaken. • Bank of Canada policy meeting • BoC kept its benchmark interest rate unchanged at 0.5%, as was widely expected. But in the statement accompanying the decision, they warned that lower prices for oil and other commodities will weigh more than expected on Canada’s economy. • This has led to a modest downward revision to the Bank’s growth forecast for 2016 and 2017. As such, CAD came under renewed selling pressure. • Kiwi bounced after NZ finmin said that NZD FX rate has adjust considerably • Today: • UK: Retail sales for September. Both the headline and the core (ex-fuel) rates are forecast to have increased, which could prove GBP-positive. • US: Existing home sales for September. Following the improvement in housing starts and building permits for the same month, a more-than-expected improvement looks possible. This could strengthen USD a bit. Initial jobless claims for the week ended on Oct. 12 are also coming out. • Canada: Retail sales are forecast to have slowed in August. This could weaken CAD further.
Main points for Today
• All eyes on the ECB policy meeting
• ECB members emphasized recently that the door remains open for further easing measures but it’s too early to talk about extending QE beyond September 2016.
• ECB’s Draghi could communicate again that they are willing and ready to act if needed.
• In our view, we could see more dovish rhetoric even a promise of an expansion of the current program, either the size or the horizon, but no action yet. We will be looking for hints that further policy accommodation could be introduced at Dec. meeting. In such case, EUR could weaken.
• Bank of Canada policy meeting
• BoC kept its benchmark interest rate unchanged at 0.5%, as was widely expected. But in the statement accompanying the decision, they warned that lower prices for oil and other commodities will weigh more than expected on Canada’s economy.
• This has led to a modest downward revision to the Bank’s growth forecast for 2016 and 2017. As such, CAD came under renewed selling pressure.
• Kiwi bounced after NZ finmin said that NZD FX rate has adjust considerably
• Today:
• UK: Retail sales for September. Both the headline and the core (ex-fuel) rates are forecast to have increased, which could prove GBP-positive.
• US: Existing home sales for September. Following the improvement in housing starts and building permits for the same month, a more-than-expected improvement looks possible. This could strengthen USD a bit. Initial jobless claims for the week ended on Oct. 12 are also coming out.
• Canada: Retail sales are forecast to have slowed in August. This could weaken CAD further.
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