Market movers today
We expect the ECB to announce government bond purchases of EUR750bn today. This would be slightly positive for the market, where consensus for purchases seems to be building somewhere around EUR500-600bn. While the aggregate headline figure is the focal point for the market, the pace is more important in our view, as the aggregate size and composition are likely to be altered along the way.
There will be focus on the possible reaction from Denmark's Nationalbank (DN) to the ECB's announcement. We expect DN to cut the key policy rate by 10bp to minus 0.30% at 16:00 CET to cap further EUR/DKK downside.
The ECB announcement is likely to overshadow all other releases on the day, which include US initial jobless claims, expected to decline to 300K, and the November FHFA house price index, which is expected to show a continued gradual increase in US house prices.
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