ECB is expected to announce €50 bln bond purchases

Thursday, January 22, 2015

European equity markets opened this morning higher ahead of ECB’s decision. The DAX, CAC and London equity benchmark edged higher within the recent range. According to latest rumours, it is expected that the European Central Bank has been debating plans to make monthly purchases of EUR 50 bln in government bonds for a one to two year programme. The official announcement is expected at 1.30 GMT today, when Mario Draghi will provide details on the amount of QE in order to boost the European economies.    

EUR trades around 1.16 ahead of ECB's announcement

EURUSD Curncy (EUR-USD X-RATE)   2015-01-22 09-10-16

Asian equity markets edged higher overnight, tracking gains in the US equities. The Nikkei index gained 48.54 points (+0.28%) to finish the session at 17,329, while  the Hang Seng index climbed 0.70% higher (170 points) to breach 24,500.

The USD index held around 92.9 in early trade this morning against a basket of currencies. The Euro remained under pressure and hovered around 1.16 against the dollar this morning, as investors remain cautious ahead of the crucial QE announcement and the upcoming Greek elections on Sunday.  

USD index   

DXY Curncy (DOLLAR INDEX SPOT)   2015-01-22 08-20-52

We experienced high volatility in precious metals in the recent trading sessions. Gold breached the key level of $1300 yesterday and reached a high at $1305.25/ounce but gave back earlier gains and ended the trading session at $1293.09. This morning, the yellow metal came under renewed pressure after retreating towards $1285 in early trade. Silver tracked the downtrend and slid also lower to retest $18 this morning.  

XAU- Gold spot

XAU Curncy (Gold Spot   $_Oz )  D 2015-01-22 09-11-08

On the macroeconomic front, it is a busy day today with the main focus transferring to the ECB’s interest rate and QE decisions as well as UK Public sector net cash requirements (PSNCR) data. In the US, investors will be keeping an eye on the weekly jobless claims as well as FHFA house price index and Kansas City Fed manufacturing activity, which could provide further momentum to the USD.

Events for today:

 

JP

Jan

BoJ Monetary Policy Statement

0930

UK

Dec

PSNCR & PSNB

1000

EZ

Jan

Government Debt & Deficit

1245

EZ

Jan

ECB Rate

1330

US

w/e

Jobless Claims

1400

US

Nov

FHFA House Price Index

1530

US

w/e

EIA Nat Gas

1600

US

w/e

EIA Energy Stocks

1600

US

Jan

Kansas Fed manufacturing

 

All times UK Local Time

 

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