Awaiting ECB Decision & Draghis First Conference

G20 started today in France; Greek government closer to losing the confidence vote; UK PMI services rose but less than anticipated. Market turns to ECB's rate announcement and press conference and later to US ISM non manufacturing and factory orders.

The first day of the G20 summit started today in France with Greece as the main topic of negotiations yet again. It is remarkable how quickly the idea that Greece could leave the Eurozone became a real possibility. Markets are likely to respond to the latest headlines regarding possible investments into the EFSF.

The political situation in Greece is getting more serious as Eva Kaili, Greek socialist party lawmaker, announced she will not back the government in the upcoming confidence vote. Without her support, the governing majority shrank to a single seat. However, falling government could imply that the referendum could be cancelled which is currently contributing to the common currency strength.

In the UK, services PMI declined in October to 51.3 from 52.9. Even though the service sector did not contract, the expansion was weak which supports BOE view of growth risks and peaking inflation. Lower output and smaller new orders contributed to the decline. GBPUSD trades near session highs round 1.60.

The New York session is likely to be busy and volatile today. It starts at 8:30 am ET with jobless claims that are expected at 401K from last week's 402K. The reaction will be muted though as traders will wait for Eurozone rate announcement due 15 minutes later at 8:45 am and especially for new ECB's president Mario Draghi's first press conference that is scheduled to start at 9:30 am. Rates are generally expected to remain unchanged at 1.5% but there is a growing number of analysts who expect 25 bps cut. Few even anticipate 50 bps cut.

Considering how quickly and significantly fundamentals have deteriorated over the past few weeks, the probability of a rate cut is somewhat higher. Whether will Mario Draghi begin his eight year presidency with policy easing will the market learn shortly.

10:00 am will bring October ISM non-manufacturing that is seen slightly higher at 53.7 from 53.0 and factory orders that are expected unchanged in September from a -0.2% in August.