Draghi speech sends Euro crashing


23 October, AtoZForex.com, Lagos – UK’s retail sales year-on-year estimates continued to show growth for the 29th consecutive month in September 2015, increasing by 6.5% compared with September 2014. However, compared with August 2015, the retail sales impressed, coming at 1.9 percent. This marks the best release in over a year. The figure initially sent the pound soaring.

Canada’s Core Retail Sales m/m disappointed, coming flat at 0.0%, while the retail sales came at 0.5%, rising for the fourth consecutive month in September.

Draghi speech sends Euro crashing

Although without a decisive step, Mario Draghi stunned the market by hinting that he stands prepared to cut interest rates and increase QE to stave off the risk of a renewed economic slump in the EU. On a different note, he stated that downside risks have surfaced for growth and the inflation outlook for the Euro region. Considering, the drop in commodity prices and concerns about emerging markets, which remain to have a negative pressure on inflation.

Read also: DB Post-ECB analysis

Hence, the ECB is planning to re-examine its current policy for the next meeting in December, while the the bank kept QE unchanged. It was also pointed that there seemed to be greater fear about a deflationary spiral, including from the impact of oil, as he sent a clear signal that the ECB will add stimulus in December.

Leaving open the prospect of both expanding asset purchases and lowering the deposit rate further below zero. The Euro fell across board, plunging to a 3-week low against the dollar.

US unemployment claims

Recent data has been looking good for the US as housing starts rebounded strongly in September and new applications for unemployment benefits fell around 42-year lows last week, pointing at solid domestic fundamentals even as the global economy falters. With the recent reports, it could keep the door open to an interest rate hike from the Federal Reserve by the end of the year.

Eurozone Manufacturing PMI

At 7:00 A.M GMT, the French Flash Manufacturing PMI is scheduled for release, forecast to come at 50.2. A potential slight decrease from 50.6 the previous month. Also, the German Flash Manufacturing PMI is scheduled for release at 7:30 A.M GMT.

A disappointing release could add further pressure on the Euro as the views of purchase managers on the economy is key, as they are considered to be well attuned to the latest economic and financial developments, and their expectations could reflect the health of the economy.

Canada Core CPI m/m (12:30 P.M GMT)

The Change in the price of goods and services purchased by consumers, excluding the 8 most volatile items is forecast to come at 0.3%. This is potentially the best release since May. This could create a relief after the country’s disappointing core retail sales figure yesterday. Although the retail sales rose for a fourth consecutive month.

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