Focus of yesterday's session was on ECB rate decision and the following press conference. The Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.05%, 0.30% and -0.30% respectively. European Central bank boss Mario Draghi warned that downside risks were increasing again and more stimulus might be necessary, causing a sharp move in equity and currency markets."It will therefore be necessary to review and possibly reconsider our monetary policy stance at our next meeting in March," Draghi told at the following news conference, making it clear that things had changed since December as oil prices fell sharply.
In the US session
Unemployment Claims and Philly Fed Manufacturing Index figures were published. In the week ending January 16, the advance figure for seasonally adjusted
initial claims was 293,000, an increase of 10,000 from the previous week's revised level. Analysts were anticipating decrease to 279,000. The previous week's level was revised down by 1,000 from 284,000 to 283,000. The 4-week moving average was 285,000, an increase of 6,500 from the previous week's revised average. The previous week's average was revised down by 250 from 278,750 to 278,500.
Philly Fed diffusion index for current activity increased from a revised reading of -10.2 in December to -3.5 and has now been negative for five consecutive months. Smaller increase to -5.8 was anticipated. The index for current new orders remained negative but increased 10 points, to -1.4.Firms reported an increase in shipments to begin the new year: The shipments index increased 12 points, its first positive reading in four months. Firms reported continued declines in inventories.
As for tomorrow, from Eurozone, French, German and Eurozone PMI data is scheduled for a release. French Services and Manufacturing PMI is expected to rise, German PMI should show decrease, while Eurozone PMI is predicted to remain unchanged. In the US session Existing Home Sales figures will be published. Incline to 5.21 million is anticipated.
Figures to watch:
French Flash Manufacturing PMI/French Flash Services PMI (Friday 9:00)
German Flash Manufacturing PMI/German Flash Services PMI (Friday 9:30)
Flash Manufacturing PMI/Flash Services PMI (Friday 10:00)
Existing Home Sales (Friday 16:00)
