Authored by Irina Slav via OilPrice.com,
Petrocurrencies are breaking away from their traditional tight link to oil prices, but all it would take for this link to return is for prices to fall bellow their current range. This seems to be the general consensus among bankers interviewed by Bloomberg’s Natasha Doff and Anna Andrianova.
While the ECB kept all of its three key rates unchanged as expected, and also kept the pace of QE at €60 billion until the end of the year, confirming the numerous trial balloons overthe past month, the ECB announced that it would cut the rate of QE in half, to €30 billion "from January 2018 until the end of September 2018" adding that this would extend "beyond, if necessary" and “until inflation path has sustainably adjusted.”
In the first sign that President Trump's favorite social network may be finally turning the corner, Twitter reported revenue, EBITDA and earnings all of which beat expectations, at revenues of $589.6MM (vs exp.$587.5MM), EBITDA of $207MM (vs exp. $161MM) and non-GAAP EPS of $0.10, better than the $0.06 expected. Monthly active users rose by 4% to 330 million in the third quarter, which while below the 330.5mm expected was still a welcome development for investors who last quarter saw a decline in the company's MAU and punished the stock appropriately.
US equity futures and Asian shares are flat this morning with European shares treading water ahead of the ECB's policy meeting in which it’s expected to announce a tapering to its €60bn in monthly QE. On this busiest day of Q3 earnings season, companies set to report earnings include Alphabet, Microsoft, Amazon and Intel, while we also get data on jobless claims and wholesale inventories.
Following up to our earlier preview of today's critical ECB announcement, here is Bloomberg macro commentator Tanvir Sundhu, who says not to sweat what Draghi says today as the ECB will be able to avoid a "taper tantrum" (for now) and as a result the risk isn’t that the ECB is going to set off a sustained bond bear market, but - due to the shortage of monetizable assets - "it’s that it might find itself low on ammunition if the economy or prices suddenly turn south."
From Sundhu's latest Macro View: