IIFT Daily Note with Peter Brown

Deflation in Europe?

Posted by:  |  Time: 8:17 am  |  Topic:
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Poor inflation figures in the Eurozone  yesterday. Core coming in at 0 .7%. Nice timing ahead of the ECB rate decision and press conference tomorrow. Will the ECB act or even give some guidance. Afterall their inflation target is 2%. Normally they are acting to get the rate down to the target but now they have to act to get the rate up. This means stimulus, by what means we do not know, but Mr Draghi is under pressure and has a divide between German expectations and the rest of Europe.

Euro took the news pretty well but I suspect the upside is limited. Stimulus of course is good for stocks and the DAX and IBEX have done well.

Good bounce in US market also and that is a pattern I expect for most of the year. (buy on dips). NFP on Friday.

Today may be Calm ahead of two very active days coming.

Levels are : Euro 1.3650  1.3570  S&P (MAR) 1834.6  1823.4  Wall St (DFB) 16560 16440

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