The market calms down ahead of the Fed’s statement this evening.
Euro zone inflation drop might back cautious Draghi
This month euro zone inflation dipped, probably vindicating ECB President Mario Draghi's cautious policy stance and also proving that the EU bloc might still be years away from a sustained ascend in consumer prices.
In March, inflation in the 19-member currency union sagged to 1.5% from a four-year peak of 2% in February, quite below hopes for 1.8% as energy, services and food prices grew slower than the previous month.
Underlying inflation, a measure closely monitored by the ECB, headed south to 0.7% from 0.9%, thus erasing pressure on Mario Draghi to tighten the ECB's money taps in the nearer future.
When the previous month overall inflation reached the ECB's objective, conservative countries such as Germany applied pressure on Draghi, calling for an end to the ECB’s 2.3 trillion euro asset buying scheme.
However, the ECB rejected those calls, pointing out that inflation has already peaked in 2017 and it won’t get back toward its 2% objective.
Follow Canadian core retail sales on September 18 at 15:30 MT time!
The US dollar gained after the Fed’s report, while riskier assets dropped. Let’s have a closer look.
Keep an eye on the UK monetary policy statement on September 17 at 14:00 MT time!