Market awaits Federal Reserve

So far this week, we have seen the European Central Bank undertake aggressive action in the bond market purchasing €1.7bn in a move to kick start the ailing European economy. This latest move from the ECB exceeded expectations, despite Mario Draghi’s public ambition to expand the balance sheet up to €1 trillion. Markets largely ignored the news and the euro remained in tight ranges against the dollar and sterling.
 
Over to the US, and for the second consecutive month Durable Goods fell -1.3 per cent against an expected 0.5. The numbers are based on big ticket items normally associated with the aeronautical, manufacturing, and automobile industries, on purchases expected to last a minimum of three years. This data is closely watched for a measure of business confidence for the overall US economy and mirrors disappointing retail sales earlier in the month. This places more pressure on the Federal Reserve who are expected to confirm the end of the quantitative easing programme at 6:00pm GMT this evening.
 
In other news, Germany’s largest lender, Deutsche Bank posted a €92m loss in Q3 following a series of scandals and increased legal costs to settle investigations. There will be a change in the top job, and Stefan Krause will step down to make way for Marcus Schenck from rival Goldman Sachs, as the bank embarks on a vast cost cutting programme.
 
We also have UK mortgage approvals this morning, with 62,000 agreements expected for September. Thursday will see German unemployment and inflation data, followed by US GDP Q3 revision in the afternoon.

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