IIFT Daily Note with Peter Brown

Finally Draghi day is here.

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We find out today what Mr Draghi’s bond buying plan is and how it will effect the market. Much has been leaked but the devil is in the detail. Today is all about the Euro and the S&P will react rather than lead.

Here are the scenarios:-

1. A plan with detail and conviction. Euro goes into a sustained rally heading for 1.3450 medium term.

2. A Plan with little detail. Small bounce towards 1.2685 than a selloff towards 1.2300 within days.

3. A plan with some detail whichs keeps us in the trading range 1.2680  1.2480 for weeks.

4. A plan that is low on detail conbined with the old story that fixing the Euro Zone is political and the ECB stay within it’s mandate. Euro is a straight sell towards the 1.2000 low.

Two other things are important. Spain looks close to asking for a full bailout, that should rally the market initially when they put in a formal request. And we have the non farm payrolls tommorrow. If the figures are bad we could be closer to QE in America. Since Draghi’s plan is not QE this will support the Euro.


Well I will update on twitter when he is finished speaking.

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