Some important releases are due today ahead of next week’s ECB meeting. Acontinuation of the weakness in monetary and credit developments will add to thearguments for more easing from the ECB. But credit growth is expected to show someimprovement this year as the snapshot of banks’ balance sheets has been taken.
German HICP will give the first insight into what to expect of the euro area aggregatedue to be released tomorrow. We expect the German figure to remain unchanged at1.2% but there could be downside risk to our forecast. German unemployment is alsodue for release.
Draghi will get the opportunity to comment on the data releases when he speakstonight. Yesterday, Mersch continued the dovish stance and, related to the ECB’stoolbox, he said the ECB is in the process of reflecting 360 degrees on policy. Focuscould also be on the ECB’s outlook for the medium term. Weidmann is also due tospeak and could provide a more hawkish stance.
In the US we expect durable goods orders to show a small decline. Moreover, initialjobless claims are expected to remain around 335k.
The Fed’s Yellen is due to speak to the Senate in her semi-annual testimony. Hercomments will be scrutinised for insight into her view on the latest weak economicdata and whether the Fed will make any changes to its schedule for tapering.
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Danske Bank