European markets are expected to open a little mixed this morning following a lacklustre lead from the US and Asian sessions overnight.
With less than two weeks to go until the December meeting, at which further easing measures are widely expected to be announced, Mario Draghi’s appearance at Euro Finance Week in Frankfurt this morning is likely to be followed very closely. The minutes from the last meeting were broadly consistent with Draghi’s message in the press conference after, leaving little doubt that next month is when they’ll pull the trigger.
The markets appear to have heavily priced in further easing but the composition of it is still unclear. It looks increasingly likely that we’ll see a cut to the deposit rate from it’s current “zero lower bound”, as well as an upgrade on the asset purchase program that was launched almost a year ago. How aggressive the ECB will be on this though is still not clear and we’ll be looking to Draghi today for further insight into this. We’ll also hear from Bundesbank Head Jens Weidmann later on this morning, who may also be able to shed further light on this.
UK public sector net borrowing figures will be released this morning and are expected to show borrowing fell to only £5.5 billion last month. Unfortunately this dip is quite common for October but it does leave us on course to reduce borrowing again this year as the government continues to try and eliminate the deficit by the end of this parliament.
Later on we’ll get some more comments from Fed officials, with James Bullard and Joh Williams due to speak. We’re now less than a month away from the December meeting at which the Fed is expected to raise interest rates and these comments could provide crucial insight into what it would take for the Fed to delay the hike again.
The FTSE is expected to open 18 points higher, the CAC 1 point lower and the DAX 12 points lower.
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