•ECB’s Draghi reaffirms its readiness to do more ECB President Draghi defended Bank’s readiness to take further measures to fight the risk of low inflation. He repeated that the Bank is willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation. These comments underscored Bank’s readiness to do more, and opposed to his earlier comments during the weekend when Draghi said that “we will see whether a further stimulus is necessary” and that it was “too early” to pass judgment on lowering the deposit rate further below zero. The restated dovish rhetoric from ECB’s Draghi, keeps the common currency under selling pressure, in our view.
• NZ’s job growth fell unexpectedly, pushing up unemployment rate Coming on top of a 7.4% drop in average dairy prices at Tuesday’s auction, New Zealand’s unemployment rate rose in Q3, after employment unexpectedly fell for the first time in three years. The soft data, weighed on kiwi and pushed it lower against the dollar and raised the probability for another rate cut by the RBNZ at its end of the year policy meeting.
• Today’s highlights: During the European morning, we get the final service-sector PMIs for October from the countries we got the manufacturing data on Monday. The final forecasts for France, Germany and Eurozone are the same as the initial estimates, so no major market reaction is expected. The UK service-sector PMI for October is forecast to have risen somewhat. Having in mind the unexpected jump in the manufacturing index and the modest decline in the construction PMI, further improvement in the service sector cannot be ruled out. This could support the pound somewhat, but as long as Cable finds it difficult to overcome the 1.5500 psychological zone, I would not get so confident on the upside, especially ahead of another “Super Thursday”.
• From the US, we get the ADP employment report for October, two days ahead of the NFP release. The ADP report is expected to show that the private sector gained 180k jobs, fewer than it did in the previous month, where the print hit the crucial 200k level. However, I don’t believe that such a print would hurt the greenback too much, as Fed officials stated recently that now the labor market is improving, they are satisfied with numbers even below 200k. The ISM non-manufacturing PMI and the final Markit service-sector PMI, both for October, are coming out as well.
• Canada’s trade balance for September is also coming out.
• As for the speakers, ECB President Mario Draghi and several other Bank officials speak at the ECB Forum on Banking Supervision, while Fed Chair Yellen testifies before the House Financial Service Committee. Philadelphia Fed President Patrick Harker and New York Fed President William Dudley also speak.