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Morning Update

In Europe:

ECB president Mario Draghi announced that the European Union’s benchmark interest rate will remain unchanged at 0.75%. However, in order to provide easing the central bank will undertake Outright Monetary Transactions (OMTs) in secondary markets for sovereign bonds. There will be no quantitative limit on the size of these purchases,all purchases will focus on short term debt, and all purchases will be fully sterilized. Draghi says this is fully within the ECB’s mandate. Draghi also said separate press releases will detail the OMTs and a change in collateral requirements.

In the US:

“Seeing strength for tomorrow's employment report, ADP estimates private payrolls in August will rise 201,000. This is well above the high end of expectations at 165,000 and also well above ADP's revised level for August of 173,000.” (Barrons)

“Layoff announcements are lower, according to Challenger's count for August which is 32,239 for the second lowest of the recovery. Layoff announcements have been heavy in the telecom sector where they lead August's total. Second is health care which is another sector being hit. But in sum, today's report is very positive and points to strength for tomorrow's employment report.” (Barrons)

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