Draghi in Focus
Last night, George Osborne gave a speech in Shanghai where he announced that he wanted to create a link between the stock markets of the UK and China. He touched upon a “landmark feasibility study” which would enable the Chinese and British shares to be freely traded in both countries.
The chancellor also explained that he wanted to see the stock markets in London and Shanghai officially coupled, with UK companies able to raise funds from Chinese investors and likewise Chinese firms. Also for the first time ever, it materialised that the People’s Bank of China was looking to put into production short-term bonds in London in Chinese currency.
On the economic front, UK public finances and industrial orders declined unexpectedly last month, recording their worst August in three years. As the figures were absorbed by the market, analysts began to point to the suggestion that this signals how a global slowdown is hitting the UK’s economy.
To Europe, more specifically Greece; Greek Prime Minister Alexis Tsipras promised on Monday that he and his party will help the local economy and noted that gaining debt relief from Greece’s creditors is of the utmost importance. Concentrating on the economic releases, we had Consumer Confidence data yesterday, which came out slightly worse than analysts best forecasts. The majority of market participants will be observing Mario Draghi’s speech this afternoon. This could be vital in the clue finding process to determine whether the European Central Bank is to expand the quantitative easing programme. Many feel that Draghi will make efforts to weaken the bloc currency; however, the market works with an unpredictable feel when Draghi approaches the press.
Yesterday also saw the Euro lose ground against Sterling for the majority of the European trading session, whilst collecting gains versus the US dollar as strong sentiment continued to surround the possibility of a US rate hike in 2015.