The big news yesterday was the outcome of the much anticipated BoE and ECB meetings, where increased stimulus was the theme for both central banks. First up, the BoE delivered a shock increase of GBP75bn to the asset purchase target (taking it to 275bn total), citing severe strain in bank funding markets as the reason for the move. As expected, UK interest rates were kept on hold at 0.50%. Following up this action, the ECB announced renewed covered bond purchases as well as the provision of two long term refinancing operations in the coming months to help the banking sector deal with the prevailing lack of confidence in funding markets. Going into the meeting, there had been a great deal of talk that a rate cut might be on the cards, but clearly this did not materialize.
In other highlights, US jobless claims data was a bit of a mixed bag, as lower than expected headline numbers were counterbalanced by upward revisions to last week's data. Initial jobless claims hit 401k compared to estimates for 410k, however last week's 391k print was revised up to 395k. It was a similar story for continuing claims which superficially impressed at 3700k compared to expectations of 3725k, but the revisions to last week took the shine off things by being increased to 3752k from 3729k.
Coming up in today's session, the talk will undoubtedly be dominated by the run up to this month's non-farm payroll release, where markets are predicting 57k jobs added to the US economy in September after last month's complete lack of growth in payrolls. On Wednesday this week the ADP jobs report managed to surprise to the upside with a 91k print compared to expectations of 75k; however the correlation between the ADP and non-farms is notoriously inconsistent, so we would not assume too much based on this reading alone. US unemployment will be released at the same time, and markets are looking for an unchanged reading of 9.1%.
Biding our time until that, the Swiss unemployment rate is due early in the European session and is expected to remain stable at 2.8%, with the seasonally adjusted number likewise expected to stay at last month's reading of 3.0%. Norwegian industrial production is also due this morning, along with UK PPI and German industrial production.