No surprises from ECB or Draghi
FX Trader, Loonieviews.net
FX traders were hoping for more clarity from the European Central Bank or its president, Mario Draghi, on the pace of interest rate hikes in the Eurozone. They didn’t get it. The ECB did not deviate from the previous meeting’s message. Non-standard monetary policy measures will terminate at the end of December, and Eurozone interest rates aren’t going anywhere until the summer of 2019.
Eurozone equity indices climbed on the news. Wall Street wasn’t quite as lucky. Facebook’s (FB: NASDAQ) face-plant (its share dropped 18.19% from yesterday’s close after the company forecast slowing revenue growth in the coming quarters. The plunge helped drag the Nasdaq down 1.14% in early trading. The S&P 500 is down just 0.28%. The success of the Trump/Juncker meeting has underpinned the DJIA which has gained 0.58% this morning.
EURUSD traders who had bought the single currency on misguided hopes that Mario Draghi would be more specific as to the timing of a rate increase bailed out of their positions. EURUSD dropped from 1.1728 at the New York open to 1.1681 at 14:00 GMT.
The dip in EURUSD has dragged down the rest of the G-10 currency majors, led by a plunge in AUDUSD. This morning’s US data supported the greenback. June durable goods orders rose 1.0%, well above the -0.3% drop in May, but below the forecast for a 3.0% gain. Initial jobless claims were 217,000.
Traders are looking ahead to Friday’s US Q2 GDP report. Earlier this week, President Trump was rumoured to have leaked a result in the 5.0% area. The forecast is for a gain of 4.1%, and many market participants are expecting a forecast-beating result.
EURUSD is trading erratically inside a 1.1650-1.1750 range. A break either side will yield 0.0060 points in either direction.
Latest Market Insights
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.