Central Bank Thursday
Currencies Direct October 4th 2012 - < 1 minute read
Today is central bank decision day for the UK and Europe. The
main focus will be on the ECB and with no change expected today,
the market will look for signals on what instruments the ECB will
be motivated to use if and when additional easing is needed. It is
looking more favourable that an additional LTRO will be utilised
rather than an interest rate cut. The Bank of England is expected
to keep their interest rate on hold and also to hold fire on QE
with November the likely meeting where further QE is announced. We
are not expecting big swings on the back of the central bank
announcements today but the ECB in particular may provide some
light on future sentiment.
Today we see Spain and France going to the well and auctioning
government bonds maturing in 2014, 2015 and 2017 and a good uptake
is hoped for. The market will be focused upon Spain in particular;
especially as expectations are rising that Spain will officially
request a bailout in the near term.
Some good news out of the US yesterday with the ADP report
coming in ahead of expectations. This was particularly positive
given the FOMC’s emphasis on labour market conditions and will
build expectations of a good payrolls number tomorrow. In the FX
markets we have not seen any sizable moves in the G10 currencies as
the markets await the central bank decisions and the US non-farm
payroll number tomorrow.
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Currencies Direct