That is the only question on the minds of large Institutions, Banks, Hedge Funds, Traders, and Investors as the sun slowly rises on Eastern Australia setting up a new trading day, this Thursday 22 January. The European Central Bank, headed by Mario Draghi is tipped to start his form of QE or credit easing (bond buying), historic measures for Europe but apparently under German terms of compliance. There are lots of messy details here, too many to dissect on this forum, but the bottom line is the Euro will be affected, Stock Markets will show some volatility as money will be injected into the banking system to instigate some liquidity for business growth.
All Stock Markets around the world were up today in anticipation of the ECB move. It will be the amount of Drgaghi’s proposal that will excite or disappoint the Market players.
The Euro was also up against the Greenback, NZD – Kiwi, the Aussie and especially the Canadian “Loonie” Dollar. The pesky Swiss Franc won the battle against the Euro from Wednesday’s trading, still trying to handle the fallout from the SNB decision of letting go the peg of 1.2000. Tourists visiting this spectacular scenic country have just doubled their costs but on the bright side for Swiss citizens, imports, especially food and vegetable will become cheaper.
The most surprising move yesterday came from the beleaguered Canadian Central Bank as they lowered their interest rate 0.25 basis points to 0.75% in the wake of the massive drop in OIL prices during the last 6 months which has been negative for their economic growth. The poor old Canadian Dollar which has taken a beating of late, took a knock-out punch that floored the Loonie against the USD. The pair, USD/CAD opened the day at 1.2111 and closed at 1.2324. No analyst had predicted this move. Tens of thousands of Canadians visit the warmer climes of United States for the winter to escape the frigid ice and snow of their homeland, (the Yanks call them Snowbirds) Guess what, their stay has just got a lot more expensive.
Gold closed the day just a couple of dollars down, but did have a quick rejection around the $1300.00 mark. Silver and OIL were up marginally by days end.
The only important red-tag news today comes from the US session as all eyes around the Investment world will be on Mario Draghi and the ECB as all wait in baited anticipation of their Bond buying program. US Unemployment claims will also be announced at this time to add some more confusion to the process.