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April 2016

ECB will do whatever it takes

Published: Friday 08 April 2016

  • ECB will do whatever it takes
  • Fed Chair Yellen sees no bubble
The release of the minutes from the last European Central Bank meeting wasn't as eagerly anticipated as some previous publications. No one was expecting anything new from the ECB and Europe's Central Bank didn't disappoint.  That is perhaps a tad unfair; ECB President Mario Draghi did commit the ECB to acting like an "anchor of confidence" amidst the global storm.  So that's OK then. Vítor Constâncio, the ECB's vice president, commented that the bank would do "whatever is needed” to get inflation back up to their target level of 2.0%.
 
Those comments weakened the Euro as traders mulled the potential for further ECB measures but there is clearly disquiet amongst the ECB board as some of the members expressed concerns over how reliant retail banks were becoming on cheap central bank money and support. It's a fair concern after nearly a decade of extraordinary measures.
 
The other central banker in the news on Thursday was Janet Yellen, the Chair of the US Federal Reserve. She was at pains to assure us all that the US economy was not a bubble reaching its bursting point. This followed comments from Donald Trump but Mrs Yellen said she didn't see any sign of over-valued assets and her comments about the weak global economy served to highlight the foreign pressure on the domestic economy.  The US Dollar was a little weaker after her comments.
 
Today's news will start with UK industrial and manufacturing output. That is expected to reflect improvement in the industrial; but worse performance in the manufacturing data. If that is proven to be the case, Sterling is already very weak and will probably just remain so. Anything to the positive side would create a bit of GBP buying interest though.
 
This afternoon brings Canadian employment data and that is expected to be a tad worse than the previous month. The Canadian Dollar has been recovering somewhat as commodity and energy prices stabilise but poor employment data would knock any ebullience still in the system. If you are a CAD buyer, you may wish to place your orders later in the day. Contact your Halo Financial Consultant for more information.
 
And The Gloucestershire Echo is carrying a story that is a clear scoop. The story was all about a full KFC meal that was abandoned on the pavement in St George’s Place, Cheltenham. The fact that they even reported this is hilarious in itself (quiet news day me thinks) but it's the tweet from The Media Blog that made me really laugh. It reads "Entire KFC dropped on the floor in Cheltenham. Should Corbyn resign over this?" Love it.
 
Have a great weekend everyone.
 
 

Clever jokes

 
C, E-flat, and G walk into a bar. The bartender shows them the door and says, “Sorry, we don’t serve minors.”
 
The bartender says, “We don’t serve time travellers in here.” A time traveller walks into a bar.
I met a mathematician who had a phobia about negative numbers. He's stop at nothing to avoid them.
 
If you jumped off the bridge in Paris, you’d be in Seine.
 
René Descartes is at a party when someone says, "Aren't you Isaac Newton". Descartes replies, “I think not,” and promptly disappears.
 
I hate Russian dolls; they're so full of themselves
 
Rick Astley will let you borrow any movie from his Pixar collection, except one. He's never gonna give you Up.
 
I used to be addicted to mud. I've been clean for 4 months now.
 
What do you get if you cross a one-liner with a rhetorical question.


Today's Major Economic Releases

 
Market BST Data/Event Previous Expected
GBP 08:30 UK: Industrial output, % m/m (y/y) 0.3 0.1
GBP 08:30 UK: Manufacturing output, % m/m (y/y) -0.7 -0.2
CAD 12:30 Canada:Unemployment rate, %  7.3 7.3
CAD 12:30 Canada: Net change in employment, k -2.3 -2.3
USD 14:00 US: Wholesales inventories, % m/m -0.1 -0.3

FX Research by David Johnson

Daily Currency Analysis with Zeta Webber

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