In his speech this morning, President of the European Central Bank Mario Draghi made it very clear that the monetary policy in place across the Eurozone was here to stay. There had been talk that there may be some tapering back of the asset-buying program however that won’t be the case. Draghi also was keen to stress that until there was “sufficient proof” that economy was improving there will be no changes.
Two tier economic policy
The speech this morning will have no doubt angered some of the stronger economies financial ministers as calls for changes fall on deaf ears. The Eurozone is having to manage several economies in extreme different circumstances with Germany powering forwards and the likes of Greece and Italy in severe debt.
With this in mind there has been proposals of having a two tiered policy however it seems Mario Draghi is going to continue to ignore these calls. The danger of splitting polices would unshackle the stronger nations and potentially risk the weaker economies falling further.
Quiet weak next week
There’s a quiet weak for European data next week, especially as there is only 4 working days due to the Easter break. However this shouldn’t be mistaken for being a quite week as there could be further major market movements next week. The French election first round is now just over two weeks away and despite polls suggesting Marine Le Pen only has an outside chance stranger things have happened in the last year. If there was to be a poll suggesting Marine le Pen might have an improved chance then expect the GBP/EUR exchange rate to increase.