The week just ended began with the meeting of the European Central Bank and Mario Draghi’s dovish words. The ECB has left unchanged interest rates and the tapering hypothesis has gone for the moment.
At 13:45, the ECB announced the decision to leave interest rates unchanged; an hour later, Draghi’s press conference attended, highlighting the views of the European Central Bank on the tapering and the end of the Quantitative Easing program.
EUR / USD slipped below 1,15 at the announcement of the interest rate decision, but during the Draghi press conference it rebounded above this threshold.
The losses were mainly determined by the communicative hypothesis of extending the Quantitative Easing program if needed.
The uptrend of the single currency has not been stopped even after the dovish tones of the Governor of the European Central Bank.
The ‘super euro’ therefore does not seem to have been affected by the contrasting indications received by Mario Draghi over 1,16 against the dollar, moving to the maximum level since January 2015 and strengthening against the sterling and the yen.
One of the reasons why the euro continued to appreciate after the ECB’s decision is certainly the leaked intention of the bank to start discussing a possible reduction in economic stimulus next autumn.
Moreover, the recent appreciation of the single currency seems to have positively hit the ECB members and Governor.
On the weekend It was published as usual the data on Non Farm Payroll. The unemployment benefit requests went from 248.000 to 233.000. This was a surprise for the analysts who predicted 245.000 requests.
The continuous unemployment requests, instead, passed from 1,949 million to 1,977 million of the previous survey. In this case, the consensus was for 1,950,000 subsidy applications.
The news-surprise of the week concerns Greece that seems to be back on track after years. According to rumors of the press, there will be soon an issuance of a new five-year bond, the amount of which is not yet known.
However, it is missing Tsipras Government’s official confirmation even if the Greece payed already the 6,8 billion debt to the ECB and the IMF, thanks to 8,5 billion collected by the same creditors under the third aid program.
The news has not yet been confirmed and a few days ago the governor of the Greek central bank, Yiannis Stournaras, who said it was “a little early” to return to financial markets.
After a week dedicated entirely to the meeting of the European Central Bank and Mario Draghi’s press conference, next week it will be focused on the Federal Reserve meeting and FOMC monetary policy decision.
Investors do not expect Janet Yellen to change interest rates yet, but never say never.
In addition to this main event, during the week there will be also the publication of the manufacturing, service and composite PMI data of the Eurozone and then the Japanese inflation and US Non-Farm Payrolls.
Regarding the raw materials, the focus will be on the OPEC meeting that will give important insights to anticipate future oil price fluctuations.