(eToro Blog) Investors’ focus today will be inexorably drawn to the Eurozone, where the European Central Bank will announce changes (if any) to its monetary policy; said announcement scheduled for 12:45 p.m. (GMT). That will be followed up by the customary press conference to be held by the ECB president, Mario Draghi at 1:30 p.m. The consensus call is that the central bank will leave its benchmark interest rates unchanged at 1%; analysts will pay close attention to the wording of Mr. Draghi’s prepared statement for any hints on additional measures which could help to mitigate the continuing fiscal crisis.
Yesterday, Fitch, the credit ratings agency, added its “voice” to the myriad calls for the ECB to step up efforts to contain the crisis. Credit Suisse analysts have recently argued in a customer note that the European Central Bank should consider additional easing measures similar to those being undertaken by the Fed and Bank of England. To that end, one economist believes that Mario Draghi might hint at quantitative easing at next month’s meeting.
In economic news, the German statistics office reported that inflation declined in December, dropping to 2.1% from 2.4% on an annualized basis and the third consecutive month of declines. The German CPI of 2.1% was in line with analysts’ expectations. On a month-over-month basis, inflation was reported at 0.7% up from 0.0% in November. The statistics office reports that the reflected price increases were attributed primarily to customary seasonal rises in Christmas-related offerings i.e., accommodations, travel, etc.
The Euro had gotten a lift in early trading, with the EUR/USD pair at one point at 1.2732 but it has since fallen to 1.2713, just a few pips from its open price. The OpenBook platform is seeing a good deal of activity for the Euro-Dollar, and bears outnumber bulls by 104 to 81. Trader Hschinner, who recently opened several shorts, commented that he is expecting the pair to trend lower in the coming days. The DAX and CAC-40 are also all higher, though the outcome of today’s Spanish debt auction is likely to weigh heavily. Currently, the German DAX is up by 0.18% while the French CAC-40 is higher by 0.31%.
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