U.S. stock futures are set for a higher open on Monday despite Hurricane Irma producing heavy winds and rain across Florida on Sunday with the threat of storm surge flooding along coastal areas and wind impacts, according to the National Hurricane Center.
The U.S. dollar is trading higher against the euro, boosted by President Trump’s decision on Friday to sign a Congressional approved funding bill that provides $ 15.25 billion in initial hurricane relief from Hurricane Harvey in Texas, combined with a 3 month raising of the U.S. debt ceiling and funding of the U.S. government.
ECB September Policy Meeting
On Thursday during the European Central Bank’s September monetary policy meeting, ECB President Mario Draghi left key interest rates unchanged , as expected, and admitted that he doesn’t expect any move higher with rates in the near future.
“We expect them to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases” Draghi said at the press conference.
Concerning the ECB’s monthly quantitative easing net asset purchases of €60 billion, Draghi confirmed that they are intended to run until December 2017 or beyond, if necessary, until the Governing Council sees a “sustained adjustment in the path of inflation” consistent with the ECB’s inflation target below, but close to 2 percent.
Draghi said in the press conference that inflation in the 19 member euro area has ticked up moderately during recent months.
Euro area inflation rose to 1.5 percent in August, up from the 1.3 percent in July and June.
Still Draghi acknowledged that it was not enough to show “convincing signs of a sustained upward trend.”
Later in the press conference, Draghi admitted that there was “broad dissatisfaction with the inflation” even with core inflation improving slightly which was “tempered” by the confidence that inflation will eventually converge to the ECB’s primary inflation target of below, but close to 2 percent.
Draghi pointed out that domestic cost pressures from labor markets are subdued but underlying inflation is expected to rise gradually over the medium term.
Compared with economic projections from the ECB’s earlier June meeting, the outlook for inflation in the 19 member euro area was revised down slightly during their September policy meeting, primarily due to the appreciation of the euro.
As a result of updated September economic projections, annual HICP inflation is now forecast to be 1.5 percent in 2017, 1.2 percent in 2018 and 1.5 percent in 2019.
Compared with economic projections from their June meeting, real GDP in the euro area was revised up slightly and is now projected to increase 2.2 percent in 2017, 1.8 percent in 2018, and 1.7 percent in 2019.
Questioned about the fate of the ECB’s quantitative easing monthly asset purchases of €60 billion at the ECB’s upcoming monetary policy meeting in October, ECB President Mario Draghi avoided providing a clear answer but said that the Governing Council reiterated that during the fall these policy decisions are made and “probably the bulk of these decisions will be taken in October.”
Later, Draghi said that he doesn’t think that we are in a period of high uncertainty and “we will announce when we are ready.”
Draghi added, “The sense is that in October we should be ready but if we are not, then we will postpone. The second thing is that we don’t know exactly if any serious risk materializes which warrants such postponement. Right now, judging from the way the work is going, we should be ready when I said.”
U.S. Economic Calendar
Apple is expected to unveil their latest iPhone 8 on Tuesday and another model possibly called the iPhone X.
Some of the economic data that will be reported this week includes inflation figures on Wednesday with PPI (Producer Price Index) and CPI (Consumer Price Index) on Thursday.
August retail sales are due on Friday, a day in the market that will see quadruple witching for traders.
Also on Friday, industrial production for August, business inventories for July, and consumer sentiment for September are reported.
Tuesday- NFIB- Small Business Index, JOLTS Job openings (July)
Wednesday- PPI inflation (Aug.), MBA Mortgage Application, Crude Oil Petroleum Inventory, Treasury Budget
Thursday- CPI inflation (August), Weekly Jobless Claims, EIA Natural Gas Report, Fed Balance Sheet
Friday- Quad witching, Retail Sales (August), Empire State- N.Y. Manufacturing, Industrial Production (August), Business Inventories (July), Consumer Sentiment (Sept.).
- Corrected-the statement on this post about Apple’s iPhone X was updated to include “and another model possibly called iPhone X.”
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