The ECB meeting (tomorrow) is one the highlights this week. When the Fed changed its approach to inflation targeting 2 weeks ago it looked as the ECB had no choice but to react with more easing. The rumor is – they will not.
The has been under pressure, especially since the CPI data showed a negative y/y print. It looked inevitable – deflation risks plus pressure from the Fed (and resulting USD depreciation against the EUR) had market participants expecting more action from the ECB. However, market rumours reported by Bloomerg suggest the projections will change only slightly and that some members are actually more confident about the recovery. While that does not take easing off the table, chances could be smaller than it seemed.
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Create account Try a demo Download mobile app Download mobile appThis is helping EURUSD higher today – the pair climbs back above 1.18. Traders should bear in mind very high net speculative positioning – a clear risk for the euro. What is interesting, there’s no negative reaction on DE30. The German market is up 250 points today and trades at the highest level since last Thursday.
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