It is obvious that today’s driver in the market will be the speech by the head of the US fed, Janet Yellen before the banking committees of the Senate and the house of Representatives, which will start at 17:00 (GMT+2).

Bland statement of Janet Yellen can provide support to the stock indices. If she does not drop hints on the increase in the US interest rates in March, American and European indices will grow, while the pair EUR/USD will go down. The pair EUR/USD is under pressure from expectations that ECB will introduce economic incentives measures. At the end of January, the head of ECB Mario Draghi said that at the meeting of ECB in March the results of the current monetary policy will reevaluated and revised towards further easing.

If the results of the current monetary policy in Eurozone will be evaluated as unsatisfactory, ECB can introduce quantitative easing program. Even if the interest rate in Eurozone will not be reduced, asset buyout program can be significantly expanded.

Economic situation in Eurozone is deteriorating. Yesterday’s data showed that German industrial production dropped by 1.2% in December against 0.1% in November. On the annual basis the reduction amounted to 2.2% in addition to the decline of 0.3% in November. Exports and imports in Germany fell by 1.6% in December, which means the reduction in the exports proceeds in the budget and reduction of the domestic consumption. Euro, which has grown in price by 7% since December, has a negative impact on exports and export-oriented industries in Germany.

Industrial production in France also decreased in December (-1.6% against the forecast of +0.2% and the value of -0.9 a month ago).

This week’s indicators showing the deterioration of the economic situation in Eurozone are released at the same time when the meeting of Euro group and Ministers of Finance Council are taking place.

On Friday (11:00 GMT+2) the data on European GDP for Q4 will be released. It is expected that the index will show zero growth; on annual basis the index is expected to grow by 1.5%. If the data turns out to be below expectations, ECB will get more grounds for expanding QE program in Eurozone at the meeting on 10 March. If tough decisions on the economic incentives measures and inflation rate will be adopted, the pair EUR/USD can sharply decline.




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