EUR 
Mario Draghi spoke at the Economic and Monetary Affairs Committee yesterday,
where he gave a more positive outlook for the Eurozone. Draghi mentioned that
although the ECB expects inflation in the Euro Area to remain very low or
negative in the months ahead due to volatile energy prices.
Mario Draghi and the ECB believe inflation rates will then
increase gradually towards the end of the year. This will be supported by

EUR 
Mario Draghi spoke at the Economic and Monetary Affairs Committee yesterday,
where he gave a more positive outlook for the Eurozone. Draghi mentioned that
although the ECB expects inflation in the Euro Area to remain very low or
negative in the months ahead due to volatile energy prices.
Mario Draghi and the ECB believe inflation rates will then
increase gradually towards the end of the year. This will be supported by
the impact of the lower exchange rate and the recovery of oil prices from their
current troughs. The latest ECB projections foresee inflation at 0% in 2015,
rising to 1.5% in 2016 and 1.8% in 2017.

Draghi also hinted that the ECB is once again willing to accept Greek bonds for
funding if Greece can keep to reform pledges. With Greek bond yields being so
high, the ECB effectively rated them as junk and they have not been included in
the most recent stimulus programme however in light of the recent comments
there could be room for manoeuvre in the coming months. The markets had taken
positively to Draghi’s speech yesterday, with the EUR gaining almost 1% against
both the Pound and the Dollar. 

USD
Sales of previously owned homes fell short of expectations in February for
a second month. Showing an industry struggling to gain traction amid
rising prices and a lack of inventory. The figure came out at 4.88m which was
an improvement on last month, however not quite the 4.90m target and the 5
million annual rate.

Also 3 and 6 month bond auctions were successful for the US, pushing the
yield down to 0.02% and 0.105% respectively. Crude oil prices are still having
a major impact on the Dollar, with crude oil rising almost 2% yesterday from
$45 to $46 per barrel. Federal Reserve Vice Chair Stanley Fischer stated that a
rate hike is probably justified before the end of 2015 but will only take place
once the Federal Reserve is confident on inflation. Whilst there was a hint a
while back that June would be the target for the US to raise rates, this seems
all but diminished. 

Key
Announcements
GBP: 09:30 -UK Consumer Price Index
 expected (Feb) expected to drop to 0.1% from 0.3% 
USD :12:30  – US Consumer Price Index – expected to remain at -0.1%

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