Thursday preview: ECB to reveal policy with QE in focus

Following a quiet start to the week, the pace is set to pick up on Thursday with a batch of economic data releases and the European Central Bank’s policy decision.

Economists anticipate the ECB will keep interest rates, the deposit facility and the marginal lending facility unchanged at 0.05%, -0.20% and 0.30%, respectively.

While there are expected to be no surprise changes at the policy announcement, the market will be focused on whether ECB president Mario Draghi signals further stimulus at his press conference following the bank's governing council meeting.

Draghi is likely to provide an update on the €60bn-a-month asset-purchase programme amid speculation the ECB will extend it past September 2016 to address prolonged low inflation, a stagnant Eurozone recovery and risks from slowing emerging markets.

The ECB’s October Bank Lending Survey on Tuesday revealed a loosening of credit conditions for firms and stronger demand for loans, which was seen by analysts as suggesting the effects of QE on bank lending were working.

On Monday two members of the ECB expressed resistance to the expansion of the QE programme. ECB council member Ewald Nowotny told local media that an extension was something "we'll discuss when there's a need”.

Fellow ECB member Christian Noyer told French television that QE was working well and indicated that the €60bn month until next September was enough to turn the economy around.

“In a nutshell, the key message of the governing council's stance is that whilst weakness in demand in emerging markets is not something that is about to go away anytime soon and that downside risks to the economy have increased, it is too early to draw a firm conclusion with regard to the need for fresh policy measures,” according to Rabobank.

The Eurozone will also see the release of consumer confidence data which is expected to show a decline in October to -7.4 from -7.1 the prior month.

In the UK, retail sales will make headlines with analysts predicting a 4.7% increase in September compared to the same month a year ago, following a 3.5% increase in August.

Stateside, reports will include initial jobless claims, the house price index and existing home sales

Thursday 22 October

INTERIMS
Lombard Risk Management, Stobart Group Ltd.

INTERIM DIVIDEND PAYMENT DATE
Aquatic Foods Group , Derwent London, Netplay TV, Premier Farnell

INTERIM EX-DIVIDEND DATE
BAE Systems, Capita, Cello Group, Hansteen Holdings, Harvey Nash Group, Howden Joinery Group, InterQuest Group, Intu Properties, Marshalls, Menzies(John), ProVen Growth & Income VCT, ProVen VCT, Rolls-Royce Holdings, Rotala, Senior, Tullett Prebon, Walker Greenbank, William Hill

QUARTERLY PAYMENT DATE
Fair Oaks Income Fund Limited

QUARTERLY EX-DIVIDEND DATE
Assura , City of London Inv Trust

INTERNATIONAL ECONOMIC ANNOUNCEMENTS
Consumer Confidence Indicator (EU) (10:00)
Continuing Claims (US) (13:30)
ECB Interest Rate (EU) (12:45)
Existing Home Sales (US) (15:00)
Initial Jobless Claims (US) (13:30)
Leading Indicators (US) (15:00)

GMS
Belvoir Lettings

IMSS
Inchcape, Ladbrokes, Phoenix Group Holdings (DI), SEGRO, Travis Perkins

SPECIAL EX-DIVIDEND PAYMENT DATE
S&U, TR European Growth Trust

EGMS
FBD Holdings, Griffin Mining Ltd., Ryanair Holdings

AGMS
Argos Resources Ltd. (DI), Ashmore Group, BHP Billiton, Castleton Technology, Go-Ahead Group, Monitise, PME African Infrastructure Opportunities, Standard Life UK Smaller Companies Trust

TRADING ANNOUNCEMENTS
Mail.ru Group Ltd GDR (Reg S)

UK ECONOMIC ANNOUNCEMENTS
Internet Retail Sales (09:30)
Retail Sales (09:30)

FINAL DIVIDEND PAYMENT DATE
Oxford Instruments

FINAL EX-DIVIDEND DATE
Animalcare Group, Bailey (C.H.), Darty, Edge Performance VCT 'I' Shares, Edge Performance VCT G Shares, Galliford Try, ISG, JPMorgan Emerging Markets Inv Trust, Penna Consulting, Ricardo, Sky, Smiths Group, Thorpe (F.W.), TR European Growth Trust, Wetherspoon (J.D.), Wilmington , Wolseley