Last week was an eventful one for the markets to say the least. Quite a handful of events to digest; from key central bank decisions; to earnings season kicking in, to mixed incoming economic data and political developments taking place, not to mention some major movements within certain commodities. All this in a scenario whereby the primary bond market remains extremely active.

Without a doubt, the major event was the Swiss National Bank’s decision to remove the peg against the euro, resulting in an instantaneous appreciation of the Swiss franc by about 30% (at one stage) to parity. Large swings were also witnessed in other currency pairs, with the EURUSD trading at historical lows of €/$1.15 and the USDCHF having its fair share of volatility too.

Commodities traded lower for most of the week, with the declining trend in the price of oil persisting once again albeit, the pace of the decline abated. The price now seems to be stabilising around the $48.50/bbl level. Copper took centre stage within the commodities space last week shedding almost 7.4% since the turn of 2015, raising a few eyebrows of those investors exposed to the sector.

Earnings season was nothing to write home about either, whilst disappointing US retail sales data for the month of December (2014) had investors questioning the sustainability of the US economic recovery, most notably in view of the decline in the price of oil and the possible deflationary pressures it could have on the US economy (although, it can be argued that lower energy prices are, effectively an indirect form of monetary stimulus for US consumers as potentially it has a greater reach to low-income consumers having a higher propensity to consume).

On the political front, the issue of Greece and its possible exit still lingers on investors’ minds although politicians’ tones on the likelihood of this event unfolding has been somewhat muted over the past week. Elsewhere, Catalonian President Mas and leader of the nationalist Democratic Convergence of Catalonia have called an early regional election on 27 September 2015, which, given its proximity to the Spanish general election, could eventual result in the Catalonian issue being on the general election agenda.

Apart from the continuous incoming economic data releases and continuation of US earnings season, this week there is only one date to look out for; and that is the next ECB meeting this Thursday 22 January 2015, whereby markets expect some form of QE announcement. The question now remains as to the conditions and size of the ECB’s asset purchase programme, coupled with its implications on the Eurozone economic recovery. Whatever the outcome, we expect markets to react strongly, in either direction. The EURUSD, German 10-Year Bund and benchmark equity indices will be monitored closely by investors during Draghi’s press conference on Thursday afternoon. If the QE message is market-friendly, we do not exclude a bottoming of the negative economic data trend in the eurozone.

Apart from the continuous incoming economic data releases and continuation of US earnings season, this week there is only one focus and one date to look out for; and that is the next ECB meeting this Thursday 22 January 2015, whereby markets expect some form of QE announcement. The question now remains as to the conditions and size of the ECB’s asset purchase programme, coupled with its implications on markets. Whatever the outcome, we all know that markets are going to move, and move big, in either direction. The EURUSD, German 10-Year Bund and benchmark equity indices will be monitored closely by investors during Draghi’s press conference on Thursday afternoon. If the QE message is market-friendly, we do not exclude a bottoming of the negative economic data trend in the eurozone.