European Central Bank President Mario Draghi’s speech was the highlight of Eurozone economic activity yesterday. It turned out to be an insightful speech indeed. Draghi spoke out against deregulation of financial markets, as is being touted by Trump in the US, and also suggested that the (slightly) tapered quantitative easing policy announced in December would stimulate growth whilst pushing inflation towards the ECB’s target of 2%.
This suggests that monetary policy will be kept as it is for the foreseeable future – Draghi commented that the Eurozone economy was not yet ready for different measures. The euro weakened slightly against the dollar and sterling after this news.
Today sees a quieter day, with the German central bank President Jens Weidmann’s speech being the highlight. He will speak again on Friday.
There will also be German industrial production data, and French trade data. Given the political unpredictability in Europe and elsewhere currently, volatility is still a distinct possibility in euro markets, despite the lack of major data releases.