FXStreet (Delhi) – Research Team at TD Securities, suggest that the market participants will be focussing on the ECB decision and Euro area flash PMI data in order to get the clues about the future direction of the single currency.
Key Quotes
“ECB Decision (22 Oct): We don’t expect too much excitement from the ECB on Thursday, but we do expect expanded and extended QE (to €80bn/month until Dec-16) and possibly a depo rate cut to be announced by the end of the year, so there’s a risk of jawboning by Draghi at the press conference to help prepare markets for this, particularly after ECB hawk Nowotny declared that “additional sets of instruments are necessary” to meet the inflation target.”
“Euro Area October Flash PMIs (23 Oct): We expect the German manufacturing PMI to remain roughly flat in October, falling from 52.3 to 52.2. This puts us ahead of the consensus, which is looking for a more notable drop to 51.7. If realised, this would be the lowest reading since May. The French services PMI is likely to have fallen a bit more, from 51.9 to 50.5. Here, we are less optimistic than the market, which is only looking for a slight decline to 51.8.”
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