🔽 DE30 under pressure ahead of ECB decision

Policy decision announcement from the European Central Bank is drawing near. Money markets expect another 75 basis point rate hike and similar are expectations of economists surveyed by Bloomberg. However, it should be noted that ECB surprised to the upside on the previous two meetings. Having said that, is there a chance for a 100 bp rate move?

On the other hand, central banks around the world are starting to pivot. The Bank of Canada hiked rates by 50 bp yesterday, less than market expected. Meanwhile, the Federal Reserve is reportedly considering slowing the tightening process. Moreover, there was some chatter earlier this month that ECB will end tightening when the deposit rate reaches 2.25%. Should a 75 bp rate hike be delivered today, this rate would already be at 1.50%.

Apart from that, investors will also look for hints whether ECB plans to launch a QT programme, change terms of TLTRO loans or restart tiering. Decision will be announced at 1:15 pm BST while press conference of ECB President Lagarde will begin at 1:45 pm BST.

Market is expecting a rather hawkish message from the ECB today. However, chatter on possible Fed pivot has been supportive for both EUR and DE30 recently. Drop in energy prices also provided fuel for gains. DE30 launched today's trading slightly higher but has since erased morning gains and pulls back from an important resistance zone. Meanwhile, we can also see that yields have not pulled back noticeably relative to the rebound in the EURUSD market, which suggests that hawkish message is expected. Source: xStation5