European Open: “the bird” is back

Asian equities posted another QE-driven rally overnight (as rate hike expectations get pushed back more) after the dovish ECB conference yesterday and speculation on whether the rest of the world will follow Mr.Draghi or not. Jpy pairs also pushed higher in sympathy, with some hope that the BoJ will soon follow suit.
Quite evidently, the Euro remains quite weak across the board (especially vs. Kiwi) – but personally I do think it’s risky to pursue fresh entries today on the Euro, given the amount of space travelled already this week. Also, despite all this action, Aud remains also on the back burner as NAB and ANZ have increased mortgage lending rates, following Westpac and Commonwealth, which is a signal towards the RBA. It makes it easier for the RBA to cut rates.
Looking ahead, we have Euro area October flash PMIs today. They will be interesting to watch as we will gauge to what degree weakness in external demand may be spilling over into domestic Euro area activity; what lasting impact VW  is having, ahead of Germany’s IFO survey next week. The reaction to the data may be mixed: good news might dampen the new & improved “easing expectations” that the market has created since yesterday. Shorts are really hoping for worse news today, in order to continue selling.
Later in the day, we get Canadian CPI which is expected to soften on the headline but show a 0.1% increase on the core. A miss will most likely have the most impact, with more weakening after the rather dovish jawboning from Poloz earlier in the week. NzdCad looks like the best shot on any Cad weakness today.
Charts for Today:

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