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Markets were somewhat placid yesterday with equities managing to hold onto their levels following last week’s falls and FX seeing little in the way of any sharp moves. Investors look to be holding out for this Thursday where we will see not only the colour of Mario Draghi’s tie, but hope to hear what his latest plans of an asset backed buying program will actually entail. Will it be the outright QE that so many are hankering for or will it be something to grease the wheels of a stagnant Eurozone? Yesterday’s data did little to encourage the markets that anything was about to change in the Eurozone under the status quo, as economic sentiment dipped for the fourth month in a row and even the economic powerhouse Germany’s sentiment fell putting it in the frame for a third recession since 2008. Not to forget the other Eurozone countries also suffering from economic malaise such as France and Italy. So once again we approach an ECB meeting with the market flat lining and investors highly expectant, even desperate, for more detail of how they purpose to expand their balance sheet.

For now EURUSD remains stuck around 1.2700 and is likely to continue to do so ahead of Thursday, but in the meantime today sees German and Eurozone unemployment data, the final reading of UK GDP for Q2, a potential market mover in the form of Eurozone CPI data (expected to post a decline to 0.3% from 0.4%) and then later in the day US consumer confidence. This consumer confidence data has the potential to shift the dollar, which is flat so far this morning, as the market expects a small rise from 92.4 to 92.5.

Further reading:

EUR/USD Sep. 30 – Depressed in low range ahead of inflation data

USD/CAD Outlook ahead of the Canadian GDP data – September 2014