The European Central Bank kept interest rates unchanged on Thursday at zero percent but did not rule out a rate cut in the near future to combat slow economic growth. The Euro initially weakened off as expectations of a dovish approach by the ECB did cause the single currency to weaken but these losses were reversed when the ECB failed to deliver an interest rate that some investors had expected causing the Euro to rally.
Mario Draghi speaking on Thursday said there was evidence of resilience in the Eurozone economy, particularly in services and construction but said ‘"the outlook is getting worse and worse", especially for manufacturing. Draghi believes the current uncertainty caused by trade tensions and ‘the possibility of a hard Brexit’ has contributed to the bleak outlook for the Eurozone. The ECB is looking to exercise other measures such as quantitative easing to help stimulate Economic growth in the Eurozone.
Eurozone inflation is also stuck well below its 2% target, while industrial production in Germany, the bloc's biggest economy, is down. However, the ECB said consumer confidence, employment and bank lending remained robust. Lastly Draghi said he saw a low risk of a recession in the Eurozone but noted that a rebound in the second half is less likely as he voiced concerns about low inflation.
Boris Johnson has promised the "beginning of a new golden age", as he made his first Commons statement as PM. Johnson went onto say his government would throw itself into Brexit negotiations with energy, while Michael Gove would lead on no-deal planning as a ‘top priority’. Despite emphasising the importance of preparing for a no deal, Johnson said he would ‘much prefer’ to leave the EU with an agreement saying he would work ‘flat out to make it happen’.
Furthermore he told MPs that the withdrawal agreement negotiated with the EU by Theresa May was ‘unacceptable to his Parliament and to this country’. The deal negotiated by May was rejected three times by MPs with the backstop being a stumbling block, Johnson said he has pledged to scrap this element and look at alternative arrangements to avoid a hard boarder. Lastly the EU would need to approve such demands by Johnson but have previously stated they will not be looking to renegotiate.
13:30 - USD: Advance GDP Q/Q - Forecast at 1.8% from previous 3.8%