· ECB rate decision and press conference is set to take place on Thursday, with participants looking for indications as to if and how the central bank’s QE programme may be expanded
· US earning season continues next week, with high profile names including IBM, Alphabet, Amazon.com, Morgan Stanley and Bank of New York Mellon all scheduled to report
The most notable macro event this week comes in the form of the ECB meeting, with the rate decision and accompanying press conference scheduled for Thursday . While many analysts now believe the ECB are set to expand their QE programme after last month’s more dovish press conference from Draghi, the likes of Goldman Sachs and Barclays suggest that this meeting comes too soon for the announcement and any changes to the current program may instead take place around the turn of the year. As a reminder, last week saw ECB’s Nowotny’s dovish comments stating that additional sets of instruments are necessary, including structural tools. Nowotny’s comments were given additional attention given his soft hawk stance and as such were interpreted as a change in view of the central banker. In terms of what market participants will be looking out for, there are no suggestions of a change to current rates, with many instead keeping a close eye on any indications from Draghi for any clues regarding the timing of any alterations to the QE program or what it might entail.
Separately, with macro news fairly light this week in the US, focus instead falls on the continuation of earning season with a number of high profile earnings scheduled for release including the likes of IBM and Alphabet . Separately, special attention may be given to the likes of Amazon, after Wal-Mart saw the worst intra-day fall in over 15 years last week in the wake of their CFO announcing that FY17 EPS will decline by between 6%-12%, while also forecasting their operating expenses are to be larger than revenue growth next year. Elsewhere, earnings from Morgan Stanley and Bank of New York Mellon will also garner particular focus with participants looking to gauge the performance of banks generally after last week saw Goldman Sachs miss Street expectations on both EPS and revenue, while Citi managed to beat expectations on EPS, however falling short on revenue.