The markets continue to be dominated by last week’s Fed rate decision.
The Fed seems to have caused more concerns about emerging markets by not raising rates than it would have done if it had tightened policy.
Investors are still trying to decipher just what last week’s meeting means for the markets and what direction US and European indices are going to take.
However, this contemplation may pause a little as the ECB comes into focus this week.
Over the weekend, the Greek elections saw victory for Alexis Tsipras, cementing his mandate to lead the country out of its financial mess.
Initially, this means the current terms of the bailout will not change, and it also gives Tsipras more power when he inevitably goes back to the negotiating table with the country’s creditors.
But there will be particular attention later this week on ECB president Mario Draghi, who speaks on Wednesday.
The concerns of investors centre around whether the ECB will move to extend its QE programme.
Recent figures have shown that the Eurozone is still struggling and inflation in particular remains at worryingly low levels.
A move by the central bank to extend QE could well give the markets a little more to go on, and we will see just how seriously Draghi is taking the continued stagnation in inflation.
Yet again, the euro has failed to hold onto the $1.14 level against the dollar.
Last week we discussed how the pair had managed to hold the break above, but the move back lower was the one investors had been waiting for.
Recently, every move above $1.14 has been met with a big move back below, and this time has been no exception, with the pair falling below $1.1300.