Draghi press conference in focus It was another risk-off trading session yesterday. The first day of the fourth quarter got off to a rocky start as far as equities were concerned with the bellwether Dow Jones Industrial Average losing over 200 points to end 1.4% lower. This was one leg of a “flight-to-quality” which saw bond yields slide as investors parked their cash back into the perceived safe-haven of US Treasuries. Investors were quick to adjust their currency exposures accordingly. The Japanese yen staged a sharp rally which brought the USDJPY off from the fresh intra-day 6-year high hit earlier in the day. Meanwhile, the euro continued to suffer as the EURUSD slipped again and is currently trading just a shade above a 2-year low around the 1.2600 level. The European Central Bank (ECB) will deliver its rate decision this morning. But more importantly, Mario Draghi will hold his regular post-meeting press conference at 13:30 BST. Investors will be listening closely for any hints from the ECB President that further monetary stimulus will be made available should inflation continue on its downward track. In addition, it will be interesting to hear if Mr Draghi expresses any view on the sell-off in the euro which has had little let-up since it began early this summer. On the one hand, the ECB should be cock-a-hoop that the single currency has lost so much value so making European exports more affordable to world markets. However, no central bank wants to preside over an uncontrolled sell-off in its currency, so some calming words from Mr Draghi may be in order. Today’s other significant economic events include UK Construction PMI, US Weekly Jobless Claims and US Factory Orders.
Posted on: Thu, 02 Oct 2014 07:50:46 +0000
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