Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
To taper, or not to taper? That’s the question on the lips of European Central Bank policymakers today as they hold their final monetary policy meeting before the summer holidays.
With Europe’s economy strengthening, hawks on the ECB’s governing council will be pushing their colleagues to consider trimming (or ‘tapering’) their stimulus programme.
That programme is currently mopping up €60bn of bonds each month with newly minted money, and investors around the globe are desperate to know how, and when, the ECB might wind it down.
BUT…. the ECB needs to tread cautiously, for fear of a ‘taper tantrum’. Bond prices gyrated alarmingly last month when president Mario Draghi gave a confident speech which seemed to hint that policy would be tightened soon.
Most economists expect the governing council to postpone any decision on tapering until their September meeting. But you never know….
Assuming the ECB don’t make any policy changes today, the big moment will be Draghi’s press conference at 1.30pm BST.
Expect the euro to be volatile. Any hint of imminent tapering would send the currency soaring, while a dovish performance from Draghi could sink it. It’s currently trading at $1.152, close to an eight-month high.
Also coming up today:
We get a new healthcheck on Britain’s economy, when new retail sales figures for June are released. The City expects a small rise in spending, after sales fell unexpectedly in May.
Consumer good giant Unilever, UK retailers Sports Direct and Mothercare, banknote maker De La Rue, and energy provider SSE are all reporting results today.
- 9.30am BST: UK retail sales for June
- 10am BST: Eurozone deficit figures for Q1 2017
- 12.45pm BST: ECB interest rate decision announced
- 1.30pm: ECB holds press conference
- 1.30pm: US weekly jobless figures
- 3pm: Eurozone consumer confidence figures for July