How’s The European QE Programme Doing?
As has been the trend over the past few months, we witnessed a high degree of volatility in the markets during yesterday’s trading session. However, with major news out of the UK and US, the surprise was that we saw it mainly focus on Dollar weakness.
Retail sales data from the US disappointed somewhat as the figure came in at 0.9% as opposed to the predicted 1.1%. This was the first increase in consumer spending in 4 months but not to the extent that people were expecting. In further bad news for the US Dollar, small business confidence decreased sharply and the IMF downgraded its growth forecast for the US for 2015 and 2016. As ever with any news out of the US, this has focussed attention on the date of the impending rate hike with the favourite now being September as opposed to June.
The UK Inflation report released yesterday was something of a damp squib as inflation remained at a record low of 0% for March.This, of course, hardly fuels our own rate hike debate although with uncertainty in Europe, Euro weakness and the upcoming election, this is very much on the backburner anyway.
Today’s focus is on Mario Draghi and the ECB who meet for the first time since they started buying bonds last month. Despite certain mischievous whispers, it is highly unlikely that any changes will be made so quickly to the programme. Indeed, we should see Mario Draghi talk about the initial impact of QE.
As well as the ECB rate decision and subsequent press conference, we also have The Fed’s Beige Book, Housing Market Data and Mortgage Applications data from the US and the interest rate decision from Canada.