Draghi says: Keep calm and carry on

European Central Bank boss Mario Draghi has quietened calls for further monetary easing by confirming that it’s too early to consider opening the taps further or cutting more from the interest rate. The message was for patience and prudence at this stage.
 
The markets had anticipated that the concern over falling inflation (exacerbated by the slowdown in China) would lead to a stronger message from Mr Draghi and signal further easing. However, Mr Draghi did cover his bets by saying that the asset purchase programme is flexible, and the ECB stands ready to adjust if necessary.
 
The euro managed to claw back some of its losses on the news, and moved higher against the US dollar and the pound. The central banks are trying to keep the markets guessing for now, but the feeling is that we’ll see further easing from the ECB against the backdrop of rate increases in the US and UK.
 
Full dance card for Eurozone and US today
 
Today we have lots of data to look forward to, with the German IFO survey kicking things off. This is expected to show a decline, and the markets are likely to react accordingly if the news fails to meet that forecast.
 
Later, from the US, we have durable goods orders, which should be positive, and we also have feedback from initial jobless claims and new home sales. Data releases will be heavily in focus as the market continues to price in the next moves by the central banks.
 
US Federal Reserve Chair Janet Yellen will be speaking later today, and elaborating on the Fed’s decision to hold fire on lifting interest rates last week. The market will be on alert if Ms Yellen echoes comments made this week by some other Fed members, and hints that rates are most likely to rise later this year.
 
Enjoy your Thursday!