Spreadex Market Update
Pressure on Draghi as European markets open with a case of the pre-ECB jitters
Not that that is helping the markets by any means, the European indices failing to stray too far away from their starting price as uncertainty over what Mario Draghi has in store persists.
Veering between mild losses and even milder gains the DAX perfectly displayed investors’ nervousness this Thursday, unwilling to commit too much either way until after the ECB’s new plan is revealed. Expectations are balanced on a knife edge, and there is likely a fine line between what will be deemed as satisfactory and disappointing, a line Mario Draghi failed to sufficiently walk back in December. How much the ECB cuts its deposit rates by, whether it introduces a two-tiered system for bank deposits and how much, if by anything, it widens and extends the current QE programme are the key questions ahead of Draghi’s press conference, the answers to which are set to dictate this afternoon’s trading. For now, however, investors will have to sit tight and wait and see.
Dropping by around 5 points at the open the FTSE may have less in at stake in today’s ECB meeting, but it nevertheless will rise and fall on the sentiment wafting over from the Eurozone, especially with its empty economic calendar this Thursday. With Brent Crude still above $40.50 per barrel (though away from its $41-touching highs) the UK’s commodity sector is erring on the green side of things, preventing the FTSE from falling any further as investors twiddle their thumbs until this afternoon.
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