Mario Draghi held his powder dry at the ECB meeting yesterday, leaving all of the central bank’s three key interest rates unchanged, and as expected decided to talk down the Euro with strong hints of a possible extension to QE at the meeting in March. EURUSD meanwhile dropped nearly 1% throughout the press conference, though regained the majority of the losses during the North American session closing the day only slightly lower. Meanwhile, a surge in oil prices despite another build-up in storage inventories prompted USDCAD to fall by nearly 1.7% yesterday, as longs were being unwound. Lastly, USDJPY has been steadily rising, nearly 1% since yesterday’s open, following a headline suggesting that the Bank of Japan was considering additional easing measures. Today’s economic data kicks off with flash manufacturing and services data out of Europe, which is more or less expected to remain stable and in slightly expansion territory. Meanwhile, the UK is scheduled to release retail sales figures, which are expected to contract during the Christmas season despite rising wages and low inflation levels. Finishing off the week, Canada will release inflation and retail sales data, both of whom risk to come in below forecasts as tumbling energy prices have not encouraged consumers to boost their spending. Lastly, existing homes in the US are expected to have rebounded to 5.21M, following last month’s shockingly low 4.76M figure – a low not seen since May of 2014. |
