According to the data presented by Eurostat yesterday, industrial production in Eurozone was at the level of -1.1% in July and -0.5% on annual basis, Note that July was the first month after Brexit. Sales continue in the European stock markets due to the decline in oil prices, inactivity of the ECB.
Last week the European Central Bank left its monetary policy unchanged. ECB President Mario Draghi did not announce new stimulus measures for the first time in more than two years, but he said that the experts of the Central Bank would again review quantitative easing program, which involves purchasing of assets for 80 billion euro a month to ensure successful implementation of the program. The ECB has so far failed to overcome extremely low inflation in the Eurozone and to boost economic growth in the region.
A lot of important economic news will be released today. At 12:00(GMT+3) trade balance of Eurozone in July and consumer price index in the Eurozone in August will be published, the latter is the key indicator of inflation, having significant impact on the ECB’s monetary policy. According to the forecast, the index will be +0.2% on annual basis that will be a positive factor for the Euro.
Recent European and German macro-economic data indicates possibility of deflation in Eurozone. If consumer price index will be below the forecast, Euro will fall in the currency market. The lower the index, the higher are the chances of the key rate lowering in the near future.
At 14:00 (GMT+3) interest rate decision by the Bank of England will become known. According to market expectations, the rate will remain at the current level of 0.25%. If the forecast proves to be wrong market volatility will increase first in the cross-pair EUR/GBP and then in the pair EUR/USD.
Starting from 15:30 the most important macro-economic US statistics for August will be released, including: retail sales, producer price index, Philadelphia Fed business activity index in the manufacturing sector and the number of applications for unemployment benefits. At 16:15 – industrial production in the US and capacity utilization for August will become known. Market volatility today is expected to be very high.