Last night Mario Draghi discussed monetary policy before the Committee on Economic and Monetary Affairs of the European Parliament. In his speech he mentioned that Europe's recovery could suffer if the euro currency strengthened and that Quantitative easing is potentially the last option for the ECB as it could improve the supply of bank credit and also increase demand for credit as banks offer more loans out to businesses.
Staff at the International Monetary Fund ( IMF) argued that a new asset-purchase scheme would drive up growth and inflation. But they also mentioned that it could cause the euro to strengthen which is not what Europe is after.
Industrial production in the Eurozone fell by 1.1% in May and a 2.4% fall in production of intermediate goods - such as parts used for cars. There was a 2.2% drop in the production of non-durable items such as food or cosmetics. The energy sector was the only one to grow, showing a 3% increase after a 1.2% growth in April.
Industrial production in Germany, France and Italy fell month-on-month. Germany saw the biggest drop since May 2013 with a 1.4% fall.France, with a 1.3% decline, recorded the steepest fall in production since June 2013 and Italy's production registered its worst performance since November 2012 with a 1.2% drop.
Today we have Janet Yellen speaking, potentially about needing to keep interest rates near zero for a reasonable period, even after a report this month showed unemployment fell to an almost six-year low.
Although unemployment fell to 6.1% last month and inflation risen closer to the Fed’s 2% target, analysts suggest there is still too much uncertainty.The most anticipated topic is if Yellen will provide more clues as to when the central bank will raise interest rates for the first time since 2006.
9:30- BST- GBP- Consumer price index YOY expected to go from 1.5% to 1.6%.
9:30- BST- GBP- Core consumer price index expected to go from 1.6% to 1.7%.
10:00- BST- GBP: Mark Carney Speech
13:30- BST- GBP: Retail sales figures MOM expected to rise from 0.3% to 0.6%.
*BST Denotes British Summertime
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