The situation in the Eurozone is deteriorating and Mario Draghi is at the centre of attention. Despite the recent interest cut he has been reluctant to intervene in any other way. Can the ECB wait much longer?  What most analysts want to be hearing from Draghi today is a resurrection of Sovereign Market Program – the ECB’s bond buying program. Spain and Italy are practically begging for this after not being rewarded by the markets for more austerity.

The situation in the Eurozone is deteriorating and Mario Draghi is at the centre of attention. Despite the recent interest cut he has been reluctant to intervene in any other way. Can the ECB wait much longer?  What most analysts want to be hearing from Draghi today is a resurrection of Sovereign Market Program – the ECB’s bond buying program. Spain and Italy are practically begging for this after not being rewarded by the markets for more austerity.

In the UK, the market will be glued to the BoE’s schedule release of its monetary policy today. Market expectations are pointing to the bank holding both rates at 0.5% and QE program size at £375 Billion. But in the middle term it is believed that further easing in monetary policy is likely to be necessary, especially because of the paralysing state of the UK’s manufacturing sector.

The Greek coalition has approved additional spending cuts worth over €11.5bn, which will try to be saved over the next two years. The agreement was reached after the socialist party leader Evangelos Venizelos no longer opposed to further reductions in pensions and public sector wages. This could bode well for the Euro as confidence rises.

The US Federal Reserve decided yesterday to keep the target range for the interest rate at 0 -0.25%, while reiterating that economic conditions are likely to warrant “exceptionally low levels” for at least up until late 2014.The minutes were noticeably more dovish than last month and QE is likely to make way in September.

Today’s Fundamentals.

N/A EUR Spanish 10-y Obligaciones Auction

N/A EUR Spanish 2-y Bond Auction

09.30 GBP UK PMI Construction (Jul) – Thisis predicted to fall from the previous market level 48.2 and is likely to be a negative for the Pound.

10.00 EUR EMU Producer Price Index (YoY) (Jun) – This is predicted to fall significantly from the previous level 2.3% nearer the consensus level 1.9%, which will be a negative for EUR

10.00 EUR EMU Producer Price Index (MoM) (Jun) – Thismeasures the change in prices received by domestic producers of commodities in all stages of processingandis predicted to fall from the previous market level -0.5, anegative to the Euro.

12.00 GBP UK BoE Interest Rate Decision – Thisis predicted to stay at the same level 0.5% which will bring stability to Sterling.

12.00 GBP UK BoE Interest Rate Decision – Itis also predicted to stay at the same level 375B Pounds,   which will bring stability to Sterling.

12.45 EUR EMU ECB Interest Rate Decision – Itis predicted to stay at the same level 0.75%, bringing much needed stability to the Euro.

1.30 EUR EMU ECB President Draghi’s Speech

14.00 USD United States Factory Orders (MoM) (Jun) – This is predicted to decrease significantly from the previous position of 0.7% to nearer the consensus of – 0.3% a big negative for the Dollar.

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