Market themes of the Day: ECB is set to end QE and lower economic projections

Mario Blascak, PhD Independent Analyst

What you need to know before markets open
Main themes:

The UK Prime Minister Theresa May won Conservative party no-confidence vote getting 200 out of 317 votes. Her narrow victory dents her position on Tory party leader for a year as she still may face the House of Commons no-confidence vote.
The US core CPI accelerated to 2.2% y/y in November, in line with expectations. The FXStreet’s senior analyst Joseph Trevisani noted that ”the Fed can remove inflation from its list of current worries. Core CPI is 2.2%, PCE lower, the economy at 3% and improving wages. Chairman Powell's note that "The economy is strong, unemployment is near 50-year lows, and inflation is roughly at our 2 percent objective,” is true.”
The ECB Governing Council meeting headlines the day with the end of the asset purchasing program and lowering of the economic projections expected. For details read my ECB Preview here.
The European Union leaders meet in Brussels.
Swiss Central Bank is scheduled to meet with little hope for other than a written notice of Swiss franc being overvalued.

Europe

The Eurozone industrial production rose 0.2% m/m in October accelerating to 1.2% y/y.
German inflation is expected to confirm the preliminary rise of 2.2% in November.
The ECB Governing Council meeting headlines the day with the end of the asset purchasing program and lowering of the economic projections expected. For details read my ECB Preview here.

The UK Prime Minister Theresa May won Conservative party no-confidence vote getting 200 out of 317 votes. Her narrow victory dents her position on Tory party leader for a year as she still may face the House of Commons no-confidence vote.
After winning a no-confidence vote in her own party, Theresa May should go stronger to the EU leaders’ summit.

The US core CPI accelerated to 2.2% y/y in November, in line with expectations. The FXStreet’s senior analyst Joseph Trevisani noted that ”the Fed can remove inflation from its list of current worries. Core CPI is 2.2%, PCE lower, the economy at 3% and improving wages. Chairman Powell's note that "The economy is strong, unemployment is near 50-year lows, and inflation is roughly at our 2 percent objective,” is true.”
The US weekly jobless claims are expected to rise by 225K in the week ending December 7.

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

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