ECB Monetary Policy in Focus

Equities managed to get a breather as Chinese markets were closed until Monday for a near week-long holiday. The Dow Jones Index recovered 294 points from the open to close the day with moderate gains of near 1.83%. However, the main question is whether the US equity markets will be able to sustain this bullish momentum. Tomorrow's NFP data is likely to keep the equity markets pressured with or without China. It was the same story with the German DAX, which gained close to 2.00% for the day.

The Eurozone quarterly GDP has been largely unchanging, staying between 0.40% and 0.30% this year. Inflation has also barely made any headway, floating at 0.20% for the most of this year. With the ECB's sovereign bond purchases underways and no major improvements seen in the economy, today's press conference is likely to see Draghi focus address these points. While it would be hard to speculate if the ECB will talk down the Euro, focus is likely to be on the sovereign purchases for the moment. The Euro has stabilized for the most part, after hitting lows near 1.04. With the Fed's major FOMC meeting due in a few weeks time, it is likely that today's ECB meeting will be fairly neutral.