The ECB is preparing to calm the markets




Of the euro area

Today, the ECB will hold a regular meeting on monetary policy issues. It is expected that the ECB will be its final decision phase, the incentive program, in the current structure, which is expected to be completed in January 2018. Consolidated market expectations suggest that the regulator will extend the asset purchase program for another 9 months, while the volume of redemption will be reduced to 30 billion euros per month.

If the decision on the buyback program coincides with the expectations of the market, the euro reacted rather poorly to the results of the meeting. Otherwise, there could be fluctuations in both directions. For example, the program may be extended to 6 months instead of 9 months, and the total amount of the redemption will be reduced by 40 billion euros, instead of 30 billion euros.

The ECB is concerned that does not cause a tightening of financial conditions, as well as the growth of the euro. Therefore, the results of the meeting and the speech of Mario Draghi at the press conference should be soft.

United Kingdom

The uk GDP released on Wednesday was up 0.4% in the third quarter and the annual growth was 1.5%. These preliminary data indicate a more rapid economic growth than expected yesterday.

The book has responded to the publication in confident growth, because in a week, the Bank of England will hold a regular meeting of the monetary policy and the acceleration of the GDP growth increases the chances that rates will be raised on 2 November.

At the same time, there was no certainty of an increase in the rate. Primarily this is because of the high inflation is due to the decrease of the pound sterling and the appreciation of imports, but not to the growth of the economic activity.

The book will remain a favorite pair with the dollar in the short term. However, there is no reason to wait for its reinforcement above the October high of 1,337 registered for the time being.



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