Daily Video Analysis: All Eyes and Ears on Mario Draghi and the ECB

Today, Wednesday, October 15, 2014. Our daily video analysis begins with a busy news day as we have already gotten off to a fast start with China releasing a whole slew of data.

Looking at today’s economic calendar, China released a lot of data. The released their Consumer prices including the annual CPI. We also got Producer prices and new loans. We missed the annual CPI number by a bit and produce prices continues to contract coming in -1.8 percent lower from the year before. Overall, these numbers were not as bad as they could have been. Still, investors shrugged off the news. They are more focused on the bigger global picture, which does not look great.

Europe is continuing to struggle and all eyes and ears will be on Mario Draghi, President of the European Central Bank as he is set to give a speech at 0700 GMT. We will be listening to any clues regarding further monetary easing including an asset purchase program (QE). This could be the only way to stop the euro’s deflationary fall and kick start any economic growth in the Eurozone.

Later today at 1230 GMT the U.S. will release retail sales and retail sales ex auto sales. We are expecting these numbers to beat expectations. U.S. equity markets could use some cheer to continue the rally we saw yesterday.

Let us begin with China’s mainland benchmark, the Shanghai Composite. We are at 2364.57, just below a technical level at 2365. The correction lower from 2,390 is still on and we are consolidating a bit for now.

Next, I want to look at the EUR/USD. The euro is pausing just above the support at 1.2605 and consolidating. Everything depends on what Draghi says today. If investors hear what they want, signs of a QE program then we could bounce higher here to 1.2950. If not, the slide lower will continue.

Lastly, let’s talk about WTI Crude Oil. Oil is taking a beating. Our chief market strategist David Frank has been talking about crude sliding to $70 per barrel, and way things look now, black gold is sinking in that direction.

We saw its biggest percentage drop in two years yesterday on the heels of a forecast downgrade for global consumption and a boost in shale production from the U.S. Also OPEC members are not willing to cut production right now. We are below the technical level of 81.90 and challenging the support near 80.80.