Daily Market Report - 20/01/2015

Yesterday the markets main focus surronded the Euro, with European investors appearing to be more optimistic just before the European Central Bank (ECB) meeting on Thursday.  All eyes will be to see if any form of quantitive easing may be applied, with the anticipation ultimately driving the market higher. There is also some concern as the Greeks go to the polls next week for their elections votes. 

Some analysts are speculating the  ECB will announce a €600bn sovereign bond buying programme on Thursday to potentially try and recover the Euro and aim to bring inflation back up to the central bank’s target 2% ceiling.  Although the figure remains a topic of debate. The main focus for the week will be to see if they will take the plunge on Thursday with the aim being to boost the eurozone economy which could weaken the euro further and combat the prospect of deflation

We did also see Denmark’s central bank cut interest rates by 0.15% points to -0.2% to try and slow down the gains made by the krone against the euro, however analysts suggest Denmark is unlikely to abandon its currency peg with the euro despite its upward pressure over the last few weeks.  The Danish currency peg has been in place for over thirty years, whereas the Swiss ceiling was introduced only 3½ years ago. 

Over night  in  Asia the stock markets  rose and the dollar strengthened after China said its economy had not slowed as much as many in markets had feared.China grew 7.4 percent in 2014, just missing official forecasts of 7.5 percent, and its slowest growth in 24 years. But fourth-quarter expansion held steady at 7.3 percent, down on the previous three months but marginally better than expected.

However, the International Monetary Fund cut its forecast for global growth in 2015 by three-tenths of a percent to 3.5 percent and called on governments and central banks to pursue accommodative monetary policies and reforms.

Key Announcements:
10:00- EUR:  German ZEW Economic Sentiment (Jan) currently at 34.9 but expected to rise to 40

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