Will Draghi Talk down the Euro?

Daily Update - 14th November 2017

Yesterday’s Focus

•             FOMC Member Harker Speech

Yesterday’s Explained

Yesterday was a slow day with Only FOMC Member Harker Speech, but the USD came under pressure due to the fact that downside remains cushioned amid cautious tone seen around the US dollar against its main competitors, as the US tax reform uncertainty continue to weigh on the sentiment. the Senate Finance Committee released its draft tax bill, which differed from the House Republicans’ plan and proposed to delay implementing a cut in corporate tax to a 20% rate from 35% until 2019.

Pound had a negative start to the week, as markets reacted to the news of “No Confidence” letter against UK PM Theresa May while the EU negotiator for Brexit Michel Barnier stated that EU was preparing itself for the possibility of the collapse of the talks. Euro gained some of its lost momentum with a weaker dollar performance.

Today’s Focus

•             EUR Gross Domestic Product & Industrial Production & President Draghi Speech

•             GBP BOE Governor Mark Carney Speech, Consumer Price Index & Producer Price Index - Output

•             USD Janet Yellen Speech & Producer Price Index

Today’s Market

Eventful day with speeches from three key individuals, ECB President Mario Draghi, BOE Governor Mark Carney and Fed’s President Janet Yellen to give speeches today and much volatility is expected in all currencies across the board

The day starts with Europe, with their Gross Domestic Product & Industrial Production Data. The Gross Domestic Product released by the Eurostat is a measure of the total value of all goods and services produced by the Eurozone. The GDP is considered as a broad measure of the Eurozone economic activity and health. Then the Industrial Production is released by the Eurostat. It shows the volume of production of Industries such as factories and manufacturing. Up trend is regarded as inflationary which may anticipate interest rates to rise.

From UK, The Consumer Price Index released by the National Statistics is a measure of price movements by the comparison between the retail prices of a representative shopping basket of goods and services. The purchase power of GBP is dragged down by inflation. The CPI is a key indicator to measure inflation and changes in purchasing trends. Then Producer Price Index Input released by the National Statistics is a monthly measurement of the rate of inflation experienced by the UK manufactures when buying goods and services. It captures changes in the average price of a fixed basket of goods and services purchased by the UK Manufactures.

Later in the day, from US, The Producer Price Index released by the Bureau of Labor statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Changes in the PPI are widely followed as an indicator of commodity inflation.