We are now past the middle of January, and this means that the largest US companies will report their earnings for the fourth quarter and many of them will provide the results of the entire 2020.
ECB will get down to groundwork for stimulus exit
ECB Governor Mario Draghi is braced for laying the groundwork to reduce monetary stimulus when the bank’s policymakers have a meeting on Thursday. However, a subdued outlook for inflation suggests that Mario won’t probably make any commitment in the nearer future.
A major bank source told Reuters the ECB will adjust its inflation predictions, while moderately upgrading surge projections.
The given divergence would go right to the heart of the dilemma faced by Draghi as Mario needs to decide whether to wind down or extend the bank's asset purchases. As a matter of fact euro zone economic surge is definitely on its best run for a decade, and inflation is going to miss the objective, which forms the very core of the bank’s mandate for upcoming years.
Given extra worries, which firm signals could provoke market volatility and ruin the bank's plans, the policy makers are currently shifting their message just incrementally.
With surge exceeding hopes, unemployment dipping rapidly as well as the threat of deflation long gone, many experts say Draghi doesn’t have many reasons to maintain an emergency set up, so they wonder how quick the exit might be.
Poor US data, slow vaccine distribution, rising virus cases worsened the market sentiment and underpinned safe-haven currencies like the USD, and JPY.
The European Central Bank will publish the monetary policy statement with the interest rate decision on January 21, at 14:45 MT time.
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The Canadian central bank will make a monetary policy report and announce interest rates on Wednesday, January 20, at 17:00 MT time. Also, the BOC press conference will be held later.
USD’s rally takes a pause, while riskier assets are modestly rising.