Investors Cautious Before ECB Meeting And US Data

Today, some of the key places in the economic calendar are occupied by the meeting of the European Central Bank on monetary policy, and the conference of Mario Draghi after it. This time, it may happen that the head of the Central Bank will prepare the markets for the possible decrease of the rate in December.

The point is that inflationary pressure in the Eurozone at the moment is on 4-year minimum levels, and continues to fall. If the fall is going to continue, it will start threatening the region with a deflation on a Japanese manner. The European Central Bank can't simply stay idle in such situations, and if the regulator will take a decision on further mitigation, it is going to have a significant impact on the Euro. At the moment, the support level is on a price of 1.3480, and it’s breakdown can direct the pair to the area of 1.34. The more we are going to receive positive data from the USA, the more possible it is going to be that EUR/USD will move towards the level of 1.32 within the next few weeks.

American stock markets showed inconsistent dynamics yesterday. The Dow Jones managed to reach a new historical maximum having increased by 0.8% reaching the level of 15746.88 points, supported by growth of stock quotations of oil and gas monsters, Exxon Mobil (+1.3%) and Chevron (+2.7%). Also the computer giant IBM (+1,3%) had some influence. At the same time Nasdaq decreased by 0.20% and finished the trading session on a level of 3931.95 points, S&P 500 increased by 0.43% reaching the level of 1770.49 points.

The Leading Index of the USA published yesterday, showed vigorous lifting by 0.7% having exceeded market expectations, and showed that there is no reason for concern regarding the health of the American economy, at least until the end of this year. In this context, the index of volatility of the American stocks, VIX, fell yesterday to 2-month minimum, having reflected very complacent spirit of investors.

Today, investors will be very cautious before the release of important data from the USA and the decisions of the European Central Bank and Bank of England alike. As a whole, investors expect weak data on gross domestic product and the labor market, which will promote further continuation of the program of quantitative easing in the USA up until spring next year.