Good Morning - Again another day with the absence of any UK data, as such all eyes are an the ECB rate announcement at 12.45pm today. With the announcement yesterdays of Euro-zone industrial production data showing a fall of 7.7% yoy, the largest since the series began in 1990 & this mornings announcement that Euro CPI has fallen to 1.6%, well below the ECB's 2% upper target range, to add to this the data releases since the ECB's December press conference have indicated that the eurozone is weakening faster than UK. It would all go to support a significant rate cut, with 50bp being the consensus, however given the theme of the data releases a higher cut could be a possibility.
The Euro has subsequently weakened this morning to trade below 1.32 against the USD & around 0.90 against GBP.
Given the recent Global Economic downturn the price of Oil continues to fall. OPEC having cut production back in September, these cuts should have fed through to the market by the end of the 1st quarter & as such any further fall in the Oil price should be limited.
Recently market attention has been directed at Banking stocks as Deutsche Bank reported their 4th quarterly loss yesterday & both HSBC & Bank of America reportingly having to raise further capital, we have seen banking share prices take significant falls yet again over continuing concerns.
With little in the way of anything positive to draw upon, it remains another grey day in the markets.
Michael Corcoran - Assistant Manager | Treasury Solutions