ECB cut rates and announced stimulus programme

•ECB cut rates and announced stimulus programme

•The European Central Bank unexpectedly cut all its interest rates by 10bps; the rate on bank deposits moved further into negative territory

•Two new programs were announced:

•Asset-backed securities (ABS) and a broad portfolio of euro-denominated covered bonds; more details on the size of the purchases at their next meeting

•These moves show ECB concerns and that they are willing to act to prevent stagnant growth and weak inflation

•President Draghi said at the press conference that the decisions to cut interest rates and announce an ABS programme was not unanimous and he also added that “today’s rate cuts are the last ones”

•The Bank of England: 

        Maintained its interest rates as was widely expected

•The minutes of the meeting released on Sept. 17, should make for interesting reading especially after two of the nine MPC members dissenting votes at last month’s meeting.

•Today :

•US: Nonfarm payrolls for August. The forecast is for payrolls to rise by 230k vs 209k in July. Average hourly earnings are anticipated to accelerate 2.1% yoy from 2.0% yoy last month. Unemployment rate is expected to decline to 6.1% from 6.2%.

•Euro area: we get industrial production figures for July from Germany, Sweden and Norway. Eurozone’s final Q2 GDP is coming out and the forecast is for the pace to drop to 0.0% qoq, unchanged from the preliminary reading

•UK: Trade balance for June

•Canada: Unemployment rate for August is estimated to have remained unchanged at 7.1%.

•One speaker on Friday’s agenda, Boston Fed President Eric Rosengren speaks.