Will ECB Draghi Say Enough to Kill Euro Rally?

Daily Update - 25th January 2018

Yesterday’s Focus

•             EUR Markit Services PMI & Markit PMI Composite

•             EUR Germany, Markit PMI Composite, Markit Services PMI & Markit Manufacturing PMI

•             GBP Claimant Count Rate, Average Earnings including Bonus, ILO Unemployment Rate

•             USD Housing Price Index, Markit Manufacturing PMI & Markit Services PMI

Yesterday’s Explained

Eurozone PMI indicators were all positive with Euro continuing its strong momentum. All indicators revealed that employment growth continues at a rapid pace because businesses are hiring to keep up with the inflow of new orders. This leads to a positive picture for economic growth in 2018 as employment growth will fuel consumption and investment will be boosted by the high capacity utilization.

Midday from UK, The British Pound continued to outperform its major rivals against the greenback, adding 140 pips to its recent rally this Wednesday. Fueled by positive UK employment data. In the meantime, and ahead of the next round of Brexit negotiations, UK Brexit secretary Davis said tha the UK will pay the so-called divocrce bill during the transition period. From US later in the day, US manufacturing PMI surprised to the upside for the month of January. Further US data saw existing home sales dropping 3.6%, or to 5.57 million units in December, below initial estimates. Weaker existing home sales added to the pain but the US sell-off began much earlier during the Asia trading session.

Today's Market

•             EUR ECB Interest Rate Decision, ECB Deposit Rate Decision & ECB Monetary policy statement and press conference

•             CAD Retail Sales (MoM)

•             USD New Home Sales (MoM) & New Home Sales Change (MoM)

Today's Focus

Important day for the Eurozone as a whole as ECB Interest Rate Decision is to be announced by the European Central Bank followed by ECB Monetary policy statement and press conference.

Later in the day, the Retail Sales for Canada will be released which is a monthly data report that shows all goods sold by retailers based on a sampling of retail stores of different types and sizes. Towards the end of the day, from US, New Home Sales released will be released which is an important measure of housing market conditions.