Euro higher on Draghi comments

Wot no more QE?
Great news from America: A federal judge has said the 80-year-old copyright to Happy Birthday to You is invalid, meaning that we need no longer pay royalties to sing it at parties. And better news from Euroland: the ECB president says extra QE stimulus may not be necessary.

There had been considerable speculation that Mario Draghi, the president of the European Central Bank, would give a nod to the idea of increased quantitative easing when he addressed the European Parliament yesterday. In fact, whilst he did say the bank "would not hesitate to act" if the inflation outlook were to weaken, an extension to the programme beyond September 2016 would only happen "if needed". Although many analysts believe an extension will indeed be necessary, Sig. Draghi refused to make that admission yesterday.

As a result, the euro moved higher, strengthening by half a cent against sterling and the US dollar in the hour following the ECB president's comments. It shared first place with the Norwegian krone, which was helped by a fall in unemployment from 4.5% to 4.3%. At the back of the field the rand strengthened ahead of the South African Reserve Bank's interest rate announcement and sank when the bank left its 6% benchmark Rate unchanged.

Ho hum PMIs
Wednesday's rash of provisional purchasing managers' index readings delivered mostly underwhelming numbers. The only positive surprise came, unusually, from France where growth was reported by both the manufacturing and the services sectors. 

Although the German readings were stronger than those from France they came in below forecast and lower on the month. The same was true of the figures for the euro zone as a whole, while America's provisional manufacturing PMI was unchanged and on target at 53.

Wednesday's other ecostats showed South African inflation slowing from 5% to 4.6% and Canadian retail sales increasing by a monthly 0.5% in June. The Canadian figures hurt the Loonie because the increase was entirely due to vehicle sales and the previous month's data were downwardly revised. Even so, the Canadian dollar was still four fifths of a cent higher on the day.

The occasional nugget
There are plenty of ecostats on today's list but most of them are of only moderate or minimal importance. The highest-profile figure will be US durable goods orders, principally on account of its unpredictability.

This morning's New Zealand balance of trade data were better than expected on the month and below forecast for the year, thus confusing the Kiwi into immobility. The NZ dollar was helped, though, by dairy cooperative Fonterra's announcement of a higher payout to farmers. European data this morning cover business and consumer confidence in Germany and Sweden as well as Italian industrial and retail sales. US new home sales follow the durable goods orders figure.

At nine o'clock the Norges Bank is scheduled to make its interest rate announcement. A quarter-basis-point cut from 1% to 0.75% is on the cards.