IronFX Daily Commentary by Sakis Paraskevov | 23/10/2015
October 23, 2015 8:56 am
Main Points for Today
• Draghi signalled further stimulus • ECB President Draghi signaled that they stand ready to undertake further stimulus measures that could even include a cut to the already negative deposit rate. • When the ECB lowered the deposit rate to -0.2% last year, Draghi said that it has reached its floor and “technical adjustments are not going to be possible any longer”. • However, on Thursday he clearly noted that further lowering of the deposit rate was discussed at this meeting and it remains as a tool. • The degree of monetary policy accommodation will need to be re-examined at their December meeting, when the new ECB staff forecasts will be available. • In the meantime, they will continue to fully implement the current QE program, which is intended to run until the end of September 2016, or beyond if necessary. • Given that it is end of the week and we could see some profit-taking that may cause a minor corrective impulse of Thursday’s moves. Overall, I would expect EUR to drift lower. • Today: • Eurozone: Preliminary manufacturing & service-sector PMIs for October from several major European countries plus Eurozone as a whole. EAll manufacturing and service-sector PMIs were in line or above expectations, but the reaction on EUR was limited at these releases.
• Canada: CPI data for September. The headline CPI is forecast to have slowed from the previous month, while the core rate, is forecast to have remained unchanged. A disappointment in the CPI figure following the BoC meeting, could weigh on CAD and put it under renewed selling pressure.
Main Points for Today
• Draghi signalled further stimulus
• ECB President Draghi signaled that they stand ready to undertake further stimulus measures that could even include a cut to the already negative deposit rate.
• When the ECB lowered the deposit rate to -0.2% last year, Draghi said that it has reached its floor and “technical adjustments are not going to be possible any longer”.
• However, on Thursday he clearly noted that further lowering of the deposit rate was discussed at this meeting and it remains as a tool.
• The degree of monetary policy accommodation will need to be re-examined at their December meeting, when the new ECB staff forecasts will be available.
• In the meantime, they will continue to fully implement the current QE program, which is intended to run until the end of September 2016, or beyond if necessary.
• Given that it is end of the week and we could see some profit-taking that may cause a minor corrective impulse of Thursday’s moves. Overall, I would expect EUR to drift lower.
• Today:
• Eurozone: Preliminary manufacturing & service-sector PMIs for October from several major European countries plus Eurozone as a whole. EAll manufacturing and service-sector PMIs were in line or above expectations, but the reaction on EUR was limited at these releases.
• Canada: CPI data for September. The headline CPI is forecast to have slowed from the previous month, while the core rate, is forecast to have remained unchanged. A disappointment in the CPI figure following the BoC meeting, could weigh on CAD and put it under renewed selling pressure.
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