All Eyes On ECB and Trichet's Press Conference

BoE, ECB both unchanged, with no new QE from BoE. Market turns to ECB and Trichet's press conference at 8:30 EST. US Trade Balance and Canadian data also due.

The Bank of England held rates steady at 0.5% and kept Asset Purchase Facility unchanged at GBP 200 bln. Sterling spikes on the announcement across the board and sends EURGBP premium trade deeper into money.

In other news, Swiss unemployment rate remained unchanged at 3% in August and June German Trade surplus narrowed slightly from EUR 11.5 bln to EUR 10.1 bln.

EUR is under pressure after the EU commission said that there is no possibility that Greece would receive further funds unless it fulfills its commitments.

The New York session will start at 8:30 am ET with ECB press conference. In light of rapidly slowing growth, high unemployment and declining inflation it is possible that J. C. Trichet could hint a rate cut which would punish the Euro.

US Trade balance also due at 8:30 EST is seen narrowing to USD -50.6 bln in July from -53.1 bln month earlier. Unemployment claims are still seen above the important 400K mark.

8:30 am EST will also bring Canadian Building permits and Trade balance. Building permits are expected to grow 0.2% in July from 2.1% and trade balance is seen at CAD -0.8 bln from previous CAD -1.6 bln. Canadian trade deficit has been widening steadily over the past four months.

Volatility could also increase at 1:30 pm ET when Fed chairman Bernanke speaks at the Economic Club of Minnesota Luncheon where he delivers a speech about the US economic outlook. Considering that the next FOMC meeting is less than two weeks away, Bernanke will be cautious and is unlikely to provide any surprising details regarding the possibility of a further easing.