ECB gets the green light for the OMT program

•      ECB gets the green light for the OMT program

–     The EU Court of Justice removed a major legal hurdle to purchases of government bonds, and cleared the way for the ECB to introduce a QE program.

–     The Outright Monetary Transaction (OMT) program is compatible “in principle”, with the EU treaty as long as certain conditions are met.

–     Comments from Draghi that the ECB is ready to buy government bonds pushed EUR down.

–     High possibility that a decision on bond buying may be taken at the ECB meeting next Thursday.

•      GBP gets a small boost after BoE Gov. Mark Carney comments that the drop in oil prices is a “net positive” for the UK economy

–     Gov.  Carney distanced the UK low inflation with the persistently low inflation in the Eurozone.

–     EURGBP fell below 0.7740, the lows of the 6th of October 2008, and could decline even more perhaps towards 0.7620.

•      US retail sales for December fell and the previous month’s figure was revised down: This could prompt a cut to the growth rate forecast for Q4. Yet, we maintain our USD bullish view.

•      Today:

–     Eurozone: Eurozone’s trade balance for November

–     Norway: Trade balance for November

–     Canada: Existing home sales for December

–     US: Empire manufacturing PMI and the Philadelphia Fed business activity index, both for January. Initial jobless claims for the week ended Jan. 10.