Draghi : “It is essential to bring back inflation to target”

•      Draghi : “It is essential to bring back inflation to target”

–     Draghi sent a strong signal that the Bank is ready to broaden the channels through which it intervenes by altering the size, pace and composition of their purchases

–     The most significant remark in Friday’s speech was that the inflation situation in the Eurozone has become “increasingly challenging”

–     The urgency he signaled in getting inflation higher, shoot up market expectations for aggressive easing measures and pushed EUR/USD down to end the week below 1.2400

•      The People’s Bank of China cut unexpectedly its benchmark lending rate on Friday for the first time in more than two years

–     If China’s central bank follows up with a cut to reserve requirement ratio this could push the commodity currencies (AUD, NZD and CAD) further up

•      Today:

–     German Ifo survey for November, the ECB is expected to announce its covered-bond purchases

–     US: preliminary Markit service-sector and composite PMI for November, Chicago Fed National activity index for October and Dallas Fed manufacturing activity index for November

•      This week:

–     Tuesday: German final GDP and US 2nd estimate of the Q3 GDP

–     Wednesday: UK’s preliminary Q3 GDP is expected to grow 0.7% qoq, unchanged in pace from Q2

–     Thursday German CPI for November, OPEC meeting

–     Friday: . Eurozone’s unemployment rate for October and CPI estimate for November