020 7898 0500Yesterday was a surprising on the economic data front as German factory orders fell by the first time since April 2017. Against an expectation of a 0.3% gain, the manufacturing orders slipped by 0.7%. Orders from other eurozone countries fell by 1%. However, it wasn’t all bad news for Germany as the monthly retail purchasing managers’ index (PMI) rose to 53.0 in August, from 50.7 in July – anything over 50 represents growth.
Meanwhile, on the eve of the ECB’s meeting, the CEO of Deutsche Bank, John Cryan stated that he wanted the ECB to tighten its monetary policies now. Later that day, Germany’s finance minister Wolfgang Schäuble supported Cryan’s call by urging the ECB to normalise policy as soon as possible by increasing borrowing costs.
While this will not necessarily affect what ECB President Mario Draghi and his colleagues say today, it does increase the pressure on them to taper their quantitative easing and possibly increase interest rates.
It makes for a fascinating day today and it will be interesting to see what Draghi and his colleagues say, what tone they take, and how that affects euro movements through the day and rest of the week. Watch this space.
