Daily Alert: Friday 9th December 2016

Mark Nugent Daily Alert, Dec 2016

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Forex Analysis for Friday 9th December 2016
Economic Calendar

The summary of the ECB meeting is as follows: QE extended from March 2017 to end December 2017 at EUR60b/month vs current EUR80b/month. Draghi was keen to emphasize in the press conference that they could bring back the EUR80b/month purchases if necessary. He said QE was open-ended. All interest rates remain the same as expected. Re forecasts: GDP and inflation are broadly unchanged.

Market Reaction

Predictably the market initially thought the ECB was tapering QE when of course they were increasing it. There was wild volatility but in the end we got the result expected from more QE: stocks up and currency down.

Elsewhere the USD rose to the top of its short-term range and all US equity indices rose; the S&P500 and Dow30 making yet more new highs. The JPY continued sideways and the GBP is down on the week as of this morning. All the commodity currencies see a lift. Oil continues to consolidate.

Media

ECB extends bond buying
Bond market sees rosier times ahead

Today

No “top” Tier I data today.

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