Yesterday afternoon saw a speech from the President of the European Central Bank (ECB), Mario Draghi, in which he outlined plans for medium-term monetary policy. Markets were not impacted too significantly, as much of the content of the speech was widely expected. Draghi maintained his position that the threat of deflation across the bloc remains his primary concern, and that, should we see the situation worsen, he will resort to stimulus measures in the form of asset-backed security purchases. As a result, expect future inflation data to be closely scrutinised by traders, as any announcement of stimulus measure will likely further weaken the euro.
Looking forward to today we have Purchasing Managers’ Index (PMI) data from the French and German manufacturing industries. The figures are a measure of expansion or retraction in the industry, and with Germany and France being such prominent countries in the bloc, the figures should carry some weight in the market. Germany is expected to show an expanding manufacturing sector whereas France is expected to show contraction.