Daily Market Report - 17/11/2015

The European Central Bank sees a risk that investors and consumers will lose faith in policy makers’ projections for reviving inflation, Executive Board member Peter Praet said. Eight months into its 1.1 trillion-euro bond-buying program, the ECB is considering stepping up stimulus as the euro area’s sluggish recovery fails to lift consumer prices clear of the deflation danger zone. While some policy makers have said there’s little need for more action just yet, Praet said the institution is concerned about persistent miscalculation of how long it’ll take to return inflation toward its goal.

Praet, the central bank’s chief economist, said that while measures of financial conditions haven’t worsened, that’s partly because of investor expectations of more monetary stimulus. Even so, he rejected the suggestion that ECB policy is overly influenced by markets.

Price inflation in the Eurozone grew slightly more than originally estimated but remained well below the European Central Bank’s target, figures released on Monday showed.

The final reading on consumer price index for October, showed CPI grew 0.1% year-on-year last month, compared with a previous estimate indicating stagnant growth and with analysts’ expectations for an unchanged reading. Meanwhile, the core CPI, which strips out volatile items such as food and energy prices, rose 1.1% year-on-year, compared with an initial reading of 1% and with analysts’ expectations for a 1% gain.

House prices in the UK decreased in November, the latest house price balance from property tracking website Rightmove showed on Monday. The house price index fell 1.3% month-over-month in November, which was the smallest drop since 2011. In Contrast, prices grew 0.6% in the prior month. On annual basis, house prices climbed 6.2% in November. That follows the 5.6% rise in October.

Key Announcements
GBP – 09:30: Consumer Price Index – expected to rise to 0% from -0.1% (YoY)
USD – 13:30: Consumer Price Index – expected to rise to 0.1% from 0% (YoY