Draghi gives himself top marks

In mid-morning trading, the FTSE 100 is 20 points lower, as traders focus on appearances by major central bank chiefs.

- Draghi drops some hawkish hints
- A tale of two retailers
- Carney & Yellen still to come

The weakness of yesterday afternoon has continued into the new day, with markets in the UK and Europe in the red. A busy day of central bank speeches is going to keep investors on edge, with the first one from Mario Draghi already having an impact. As ever with such public utterances, the emphasis is on both the content and the subtle changes in tone; Mr Draghi continues to argue that his policies are behind the overall improvement in eurozone economies, but it was his shift of emphasis from ‘very substantial’ to ‘considerable’ where stimulus was concerned that really got everyone talking. This Delphic hint that a reduction in QE was possible was sufficient to send the euro higher. The fact
 that we have seen the Fed, BoE and ECB all tilt more towards the hawkish end of things this month should be viewed as a notable development. While the end of loose monetary policy is still a long way off, it perhaps got a little closer today.

Retailers have been in focus in London this morning, as Debenhams and Carpetright provided an insight into UK consumer spending. Carpetright managed to lay down the right kind of update, covering an improvement in sales momentum in the second half despite a drop in profits (in both the statutory and underlying formats), and the shares rallied 11% despite a worrying rise in net debt. It was less rosy for Debenhams, which is considering cutting its cloth by the closure of up to ten stores, while the shares fell 2% in early trading.

With Mario Draghi’s speech done, we now turn to Mark Carney later this morning and then Janet Yellen this evening, in what promises to be a fun-filled day for FX markets. Ahead of the open, we expect the Dow to start at 21,400, down nine points from last night’s close.