The difficult economic context of the Euro zone and weak confidence in its ability to weather the current headwinds have been pushing down the inflation expectations towards the levels referred to by Mario Draghi as 'excessively low'. According to the ECB's President speech at the 24th European Banking Congress held in Frankfurt, the monetary authority does not rule out buying
Retail sales in the United Kingdom grew at a faster pace in October than expected. After an adjusted 0.4% contraction in September the volume of sales went up 0.8% against the consensus of a more timid 0.3% increase. So far the Sterling has appreciated against all its seven major counterparts: 0.28% against the Euro and 0.31% versus the US Dollar.
Considering the latest results of a survey among purchasing managers in the production sector of China, the second largest economy appears to be in need of additional stimulus to avoid deterioration of the current situation. The HSBC Manufacturing PMI Index fell to 50.0 from 50.4 reported in October, the lowest level in the last six months.
BNP Paribas economists expect the minutes from the Federal Reserve Open Market Committee meeting held in October to boost US Dollar's appreciation against the Euro, even tough the currency pair showed little volatility today. So far EUR/USD is trading at its open of $1.2532.
Despite the growing fears of inflationary pressure, a majority of the MPC members decided to keep the key interest rate unchanged. While the committee mostly agrees there are substantial risks to the UK growth, some members argue the extra capacity may soon be depleted, which in turn may push the inflation above the 2% target.
Mario Draghi said the ECB is ready to adopt unconventional measures to induce growth if the situation warrants such a step, implying possible purchases of sovereign debt in case the economic activity slumps further. The ECB President also urged governments to initiate structural reforms, arguing the monetary policy cannot sustain robust recovery alone.
According to the BoE's recent report, the increase in the price level in November may be larger than previously expected. However, during the following six months the inflation may slow down to 0.9% before accelerating to the target level of 2% over the next three years.
The UK currency moved away from the 14-month trough reached after the downgrade of the inflation outlook in the recent report but stayed close to 1.5619, as the BoE Governor made speech in Singapore. Marc Carney mainly spoke on the topic of reliability of the modern financial system and highlighted the need for improvements in the government spending and taxation
The Japanese economy faced an unexpected 0.4% contraction in the third quarter, the second negative quarterly growth in a row, as exports and consumer spending failed to pick up following the sales tax increase. These results cast doubts over the effectiveness of the 'Abenomics' to prompt business activity in the country and lower the chance of yet another widely discussed
The Japanese currency continued to slide relative to the US Dollar against the background of indecision regarding the elections that Shinzo Abe might use to gather wider support in the parliament. USD/JPY rose more than a half of a percent today, stopping only near 116. According to Kazuo Shirai from Union Bank NA, given the current sentiment in the market,
The largest Euro area member avoided contraction, as the economy advanced 0.1% in the third quarter against the 0.1% decline in domestic product a quarter before. The boost in business activity was mainly provided by higher consumer spending and growing exports.
The strengthening domestic demand helped the second biggest Euro area economy to grow 0.3% versus the 0.1% contraction in the quarter before, while the experts expected only a 0.1% expansion. However, Michel Sapin, French Finance Minister, remains concerned that the recovery is still weak and is insufficient to combat the unemployment efficiently.
Reserve Bank of Australia Assistance Governor sees the Australian economy gaining traction in 2016, as the currency depreciates in response to the higher US Dollar interest rates. Christopher Kent believes the recovery may stay lacklustre for a while, but will be able to pick up by 2016, as the Australian Dollar has more room to depreciate - the exchange rate
Even though some analysts argue the value of the US Dollar may be lifted by the positive retail sales data to be released tomorrow, the Greenback has been underperforming relative to the Swiss Franc since 09:30 GMT. The demand for the Swiss national currency was prompted after the decrease in the PPI had turned out to be less than expected
World's second largest economy faces more headwinds to achieve its growth target, as the changes in industrial production and the level of investments in fixed asset failed to meet expectations. These disappointing results should lead to more pressure on the government to provide stimulus for the economy. The industrial production and investments grew 7.7% and 15.9%, respectively.
The Euro area's recovery is still uncertain, due to the industry output level, which rose in September at a slower pace than it was expected, highlighting the number of European cars and television sold was slowing down. The Euro zone factory output increased 0.6% in September versus the month earlier, boosted by energy and machinery.
The price of gold rises for a second day in a row amid the weakening Greenback, even though holdings of the largest exchange-traded fund keep declining. Nevertheless, the market analysts say the metal could reach a low of $1,000 an ounce by the end of the year.
Even though many analysts expected the labour data along with the Bank of England's Inflation Report to boost demand for the UK currency, the Euro has gained 0.07% against the Sterling since 10:30 GMT, reaching the level of £0.7862. The British Pound came under significant pressure today as a decrease in the number of claimants was more timid than expected
The Yen dropped to its minimal value in seven years against the US Dollar, as Shinzo Abe is planning to postpone the sales tax increase and the date of election may be drawing near. The Yen depreciated 0.8% against the US Dollar today, reaching the level of 115.83.
A National Australian Bank's survey showed the operating conditions considerably improved in October, even though the business confidence deteriorated during the same period. The level of the business confidence now stands at 4 against previously reported 5; the lowest level since September of 2013.
Russia's central bank expects there to be no growth next year, on the condition that sanctions are not lifted and the average price of oil stands at $95 per barrel. Also, according to the updated monetary policy blueprint for 2015-2017, the regulator now estimates the inflation will reach 4% in 2017 instead of 2016. So far the Ruble has depreciated
The Euro is currently rising against the US Dollar, recovering from last week's losses, as the announcement of the ECB President to reinforce stimulus for the Euro zone is positively affecting the demand for the common currency. The Euro appreciated 0.17% against the US Dollar today, reaching the level of $1.2473.
Experts expect China's authorities will adopt extra measures to boost growth, as the Consumer Price Index still stays around the weakest value since January 2010 - 1.6%, showing the China's economy is cooling. As a result, it is believed that the risk of deflation is rising, as economists expect the slowdown in business activity to persist.
Even though the global unemployment rate is rising, the US employers hired new workers last months, showing signs of the economy's recovery. Economists expect the unemployment rate to stay at a six year low of 5.9%. Meanwhile, after 248,000 new jobs created in September, employers are believed to have added approximately 231,000 new ones last month.