BOE/ECB Unchanged, Onto Draghis Conference & Jobless Claims

BOE & ECB unchanged; Spanish 10 year yield rises; AUD labor market data better; German trade surplus narrowed. Up ahead is ECB press conference; US and CAD trade deficit and jobless claims. 1 of 2 EURUSD Premium Insights hit all targets, while oil long stopped out. See more details below.

The enthusiasm from the Greek austerity package faded and EUR along with GBP broke below their yesterday's lows against the USD. The move was attributed to MNI story suggesting that Spain is unlikely to seek ESM rescue this year. As a result, the Spanish 10 year yield rose to 5.842% and consequently the Italian counterpart rose back above 5%.

The Aussie was not able to benefit from labor market data that were above expectations. Employment rose in October by 10.7K and the unemployment rate was steady at 5.4%. AUDUSD rose only to about 1.0420 but quickly lost its gains. Nevertheless, the 1.04 support still holds.

European data was limited to German trade surplus that narrowed to EUR 17 bln in September from previous EUR 18.1 bln

The BOE left rates unchanged at 0.5% and kept the asset purchase facility at GBP 375 bln. The opposition against further QE has risen recently and new data will determine the likelihood of more QE in December.

Today's meeting marks the first anniversary of Mario Draghi's presidency. The ECB will announce its rate decision at 7:45 am ET. Analysts expect the minimum bid rate to remain at 0.75% and the ECB is unlikely to announce any easing program. The focus will be on the press conference that starts at 8:30 am ET.

US Trade deficit is expected to widen only marginally in September to USD 44.9 bln from USD 44.2 bln and jobless claims are seen at 367K from last week's 363K. Canadian trade deficit is anticipated to widen to CAD 1.4 bln from CAD 1.1 bln. All three reports are due at 8:30 am.

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