Tomorrow morning the Eurozone inflation data for September will be released. There is expected to be a positive movement for the Year on Year reading, however after the last release there was concern that EU inflation may be about to start to fall. There is an expectation that at the start of the year Eurozone inflation will fall below 1% which could have a significant effect on the strength of the Euro.
Brexit talks Moving Forwards
David Davis and Michel Barnier delivered their latest press conference this morning, with Davis suggesting that the talks are now moving in a positive direction. Theresa May delivered a speech on Friday suggesting the UK will pay into the EU for the 2 years following 2019 to make sure there is not a sharp drop-off for the EU come March 2019. This now means the UK will have an additional two years than was initially expected to make sure a deal is reached with the EU for future trade.
Mario Draghi Speech
The President of the European Central Bank, Mario Draghi will speak tomorrow, offering his latest thoughts on Eurozone economy. It should be noted than when Mr Draghi speaks there is always nearly a cent movement in favour of the Euro so the rate could well move back into the 1.13’s tomorrow afternoon.
Mr Draghi is likely to be hawkish with regards to the Eurozone’s economic performance. There has also been talk of the ECB changing their current economic policy; reducing the current bond buying asset program. At the moment this policy sees the central bank buy €60bn worth of debt every month and it could be set to slow down.
Mr Draghi was reluctant when the GBP/EUR exchange rate was at 1.08 as it would probably have pushed the rate to parity. However now there has been a strengthening of the GBP/EUR rate, I wouldn’t be surprised to see talk of changes coming soon.