Another Central Bank Thursday

Another Central Bank Thursday.Another Central Bank ThursdayToday is again Central Bank decision day for the UK and Europe.

The main focus will be on the ECB and with no change expected today, the market will look for signals on what instruments the ECB will be motivated to use if and when additional easing is needed.

It is looking more favourable that an additional LTRO will be utilised rather than an interest rate cut.

The Bank of England is expected to keep their interest rate on hold and also to hold fire on QE with November the likely meeting where further QE is announced.

We are not expecting big swings on the back of the central bank announcements today but the ECB in particular may provide some light on future sentiment.

Today we see Spain and France with their snouts in the feeding troughs and auctioning government bonds maturing in 2014, 2015 and 2017 and a good uptake is hoped for.

The market will be focused upon Spain in particular; especially as expectations are rising that Spain will officially request a bailout in the near term.

Some good news out of the US yesterday with the ADP report coming in ahead of expectations.

This was particularly positive given the FOMC’s emphasis on labour market conditions and will build expectations of a good payrolls number tomorrow.

In the currency converters markets we have not seen any sizable moves in the G10 currencies as the markets await the central bank decisions and the US non-farm payroll number tomorrow.

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