Central Banks continue to dominate headlines this week

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Forex Market News

More Central Banks, Oil and a Tragic Cup

Let’s start at home where we had stronger retail sales yesterday and the RBA made no move as expected. Glenn-I’m six months behind the curve- Stevens has continued the stance that rates will remain where they are for a long time and that the dollar is too high. Not long after this the Cup had exciting acceleration from one German and tragically one dead German and one dead Japanese.

Oil

Has continued to tumble and is now down another 2% overnight to $77 a barrel. This is putting huge pressure on oil dependant currencies, namely Norway and Canada.

BOE and ECB

The markets will turn their attention to Carney and Draghi tomorrow night and more divergence. In the UK things are stabilising but not all that clear as it was 4 months ago. I doubt there will be any change and the intention of the BOE will be to keep things steady-as-she-goes. The expected rate rise from the Poms is most likely late in the 3rd quarter 2015.

Whilst Draghi has bigger issues and could well follow Kuroda’s lead in finally adding decent stimulus to the ECB balance sheets. Growth remains a real challenge for the Europeans and the EU has just recently cut its GDP expectations from 1.1% to 0.8% for 2015, and that inflation will be even weaker! Draghi has fired a few weak shots at inflation this year and needs to get the cannon out or face continued stagnation and even disinflation. We may see Draghi drag out a Magnum 0.44 on Thursday, here’s hoping!

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