Daily Economic Outlook- January 21/2016

The ECB policy decision is due today. The central bank is unlikely to make any changes in its policy after it expanded its stimulus just in December and lowered the deposit rate to -0.30%. The ECB had also extended its asset purchase program by six months to March 2017. There has been an increase in the downside risks to the inflation prospect since the last meeting in December. ECB President Draghi is expected to reiterate that the central bank will be open to additional policy easing in the future.

According to the December ECB review meeting minutes, there is a likelihood of larger stimulus than agreed, a larger expansion of asset purchase program and a larger lowering of deposit rate. Draghi is anticipated to signal additional stimulus for the next meeting in March. Meanwhile, additional hawkish members stated that the resilient economic rebound does not require further asset purchases.

Also, France's business confidence and eurozone consumer confidence data are due to be released today. The Philadelphia Fed survey and the US weekly initial jobless claims report will also be released today. The jobless claims data might give some idea on the US nonfarm payrolls in January. Weekly figures released recently indicate a small increase in the trend for initial claims.