something interesting

<  BACK TO Market Analysis

ECB will say goodbye...

 Forex_Trading_Fx_Trader_ECB_goodbye

The European Central Bank is fully expected on Thursday to affirm its plan to end its bond-buying program at year-end. But investors expect less clarity when it comes to signaling when Mario Draghi and fellow policy makers will move to nudge up ultra-low interest rates.

“We expect no new guidance on a first rate hike,” said Piet P.H. Christiansen, senior ECB/euro area analyst at Danske Bank, in a note.

The ECB’s policy statement is expected to retain its commitment to keep rates at present levels at least through the summer of 2019. The ECB’s key lending rate, known as the refi rate, stands at 0%, while the rate on deposits held overnight at the central bank is at negative 0.4%.

The policy statement is due at 1:45 p.m. Central European Time, or 7:45 a.m. Eastern, with Draghi’s news conference at the ECB’s Frankfurt headquarters set for 2:30 p.m. CET, or 8:30 a.m. ET.

By giving little hint, Draghi, the ECB president, will stick to a program of “dovish tightening” that’s seen the ECB prepare to unwind the extraordinary measures it implemented in the wake of the global financial crisis while attempting to avoid unduly tightening financial conditions, said Christiansen.

The caution stems from an economy that hasn’t fully recovered from a bout of third-quarter weakness but isn’t in dire enough straits to warrant a downgrade of the ECB’s assessment of the risks to the economic outlook, said Elwin de Groot, head of macro strategy at Rabobank, in a note.

Europe’s sluggish economy and political turmoil have been blamed for keeping pressure on European assets. The euro EURUSD, +0.5389%  is up 0.4% in October but off 5.3% versus the dollar in the year to date. The pan-European Stoxx 600 SXXP, +1.69%  has dropped more than 2% in October and is nursing a year-to-date decline of more than 10%, underperforming the S&P SPX, +1.03%which is down around 0.2%.

Analysts look for the ECB to maintain that the risks to the outlook remain “broadly balanced,” rather than skewed to the downside. Meanwhile, volatility in global financial markets, while hard for policy makers to overlook, is probably unlikely to change the ECB’s plans, de Groot said.

That all contributes to expectations Draghi, in his news conference, will try to be dull as possible, analysts said, while maintaining flexibility should the outlook deteriorate in 2019.

Investors will also focus on the ECB’s plans on reinvesting proceeds of its balance sheet, which it planned to continue doing for “an extended period of time” beyond the end of its asset-buying program.

Investors will look for any clarity on what it means by an “extended period,” said analysts at Barclays, potentially by specifying it will continue to reinvest proceeds for “two to three years and in any case as long as needed.” Anything less than two years would be viewed as hawkish by the markets, they said.

Economists overall seemed skeptical the ECB would move to extend the maturity of its bond purchases or make any big changes to how it allocates reinvestments among individual countries or types of assets.

Source: marketwatch.com

The European Central Bank is fully expected on Thursday to affirm its plan to end its bond-buying program at year-end. But investors expect less clarity when it comes to signaling when Mario Draghi and fellow policy makers will move to nudge up ultra-low interest rates.

“We expect no new guidance on a first rate hike,” said Piet P.H. Christiansen, senior ECB/euro area analyst at Danske Bank, in a note.

The ECB’s policy statement is expected to retain its commitment to keep rates at present levels at least through the summer of 2019. The ECB’s key lending rate, known as the refi rate, stands at 0%, while the rate on deposits held overnight at the central bank is at negative 0.4%.

The policy statement is due at 1:45 p.m. Central European Time, or 7:45 a.m. Eastern, with Draghi’s news conference at the ECB’s Frankfurt headquarters set for 2:30 p.m. CET, or 8:30 a.m. ET.

By giving little hint, Draghi, the ECB president, will stick to a program of “dovish tightening” that’s seen the ECB prepare to unwind the extraordinary measures it implemented in the wake of the global financial crisis while attempting to avoid unduly tightening financial conditions, said Christiansen.

The caution stems from an economy that hasn’t fully recovered from a bout of third-quarter weakness but isn’t in dire enough straits to warrant a downgrade of the ECB’s assessment of the risks to the economic outlook, said Elwin de Groot, head of macro strategy at Rabobank, in a note.

Europe’s sluggish economy and political turmoil have been blamed for keeping pressure on European assets. The euro EURUSD, +0.5389%  is up 0.4% in October but off 5.3% versus the dollar in the year to date. The pan-European Stoxx 600 SXXP, +1.69%  has dropped more than 2% in October and is nursing a year-to-date decline of more than 10%, underperforming the S&P SPX, +1.03%which is down around 0.2%.

Analysts look for the ECB to maintain that the risks to the outlook remain “broadly balanced,” rather than skewed to the downside. Meanwhile, volatility in global financial markets, while hard for policy makers to overlook, is probably unlikely to change the ECB’s plans, de Groot said.

That all contributes to expectations Draghi, in his news conference, will try to be dull as possible, analysts said, while maintaining flexibility should the outlook deteriorate in 2019.

Investors will also focus on the ECB’s plans on reinvesting proceeds of its balance sheet, which it planned to continue doing for “an extended period of time” beyond the end of its asset-buying program.

Investors will look for any clarity on what it means by an “extended period,” said analysts at Barclays, potentially by specifying it will continue to reinvest proceeds for “two to three years and in any case as long as needed.” Anything less than two years would be viewed as hawkish by the markets, they said.

Economists overall seemed skeptical the ECB would move to extend the maturity of its bond purchases or make any big changes to how it allocates reinvestments among individual countries or types of assets.

Source: marketwatch.com

lastest Articles

Company News
Thanksgiving Trading Hours
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today:Dollar retreats as Biden transition kicks off, Yellen is back, data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Let the battles commence
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Treasury-Fed feud confuses markets, Brexit and coronavirus headlines eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: XAU/USD softer, challenges the $1,850 mark
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar gains ground as lockdown concerns dampen mood, Brexit, jobless claims eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Price Analysis: Keeps targeting the 1.1920 level
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Vaccine optimism fades as covid cases rise, Bitcoin tops $18,000, Brexit eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE's Bailey: QE can prevent an unwarranted tightening in financial conditions
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Why the euro can rise in the uptrend channel, shrugging off covid conerns
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US virus restrictions dampen vaccine-related optimism, retail sales, Brexit eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Breaking: Risk rally picks up steam after Moderna says vaccine is 94.5% effective
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
OPEC's Barkindo: Resurgence of COVID-19 infections hamper oil market recovery
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar drops on vaccine optimism, clearer US political horizon, Brexit eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Focus stays on COVID
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Covid concerns dominate Friday the 13th, EZ GDP, US consumer sentiment eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Price Analysis: Further upside now targets 1.1965
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin rally accelerates as billionaires flock to the industry
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar drops with yields as markets calm from vaccine euphoria, US politics eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – What next after election mayhem?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US election: Trump campaign to make major announcement in Las Vegas at 1630 GMT
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BoE: Bailey gives sterling three reasons to rise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Stocks applaud upcoming election verdict, dollar mixed, Fed, final results awaited
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold climbs to three-day tops, $1900 mark back in sight
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Fundamentals continue pointing to the downside and only oversold conditions provide a temporary upside
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Flight to safety continues ahead of US elections, amid surging covid cases
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Election Time!
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
USD to resume the downtrend after the US election – Standard Chartered
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold spikes to two-day tops, inching back closer to $1900 mark
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Fear returns ahead of Halloween amid covid's surge, elections uncertainty
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB Preview: Status quo reduces diminishes the risk of a meaningful move in EUR/USD
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar takes a breather ahead of critical US GDP, covid-clouded ECB decision
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin breaks new yearly highs; the road to $15,000 is clear
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets licking their wounds from covid-related rout, US data eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Company News
It's Time to Fall Back
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – The final stretch
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: 50-DMA at $1924 is the level to beat for the bulls
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Fundamental reality disagrees with recent gains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Foreign intervention in US elections weighs on mood, jobless claims, politics eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Overbought, so what? Stimulus hopes blind investors' eyes (for now)
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Markets cheer hopes of US stimulus deal, election polls in focus
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold flirts with the $1,900 level in anticipation of news on the fiscal front
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: Bulls are in control and eye 1.1795
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar retreats on fresh stimulus hopes, Brexit and coronavirus news eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Time running out for Trump
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Dead cat bounce could provide sell opportunity, euro faces three headwinds
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar dominates amid stimulus and Brexit uncertainty, ahead of US retail sales
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar finds its feet amid stalled stimulus talks, ahead of US data, EU Summit
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar’s haven demand back in vogue amid stimulus delay, vaccine trial pause
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD Price Forecast: Cautious ahead of key week
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Price Analysis: Three factors why BTC is going to surge
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Yuan slumps on China’s policy move, coronavirus risk downs euro amid light trading
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Risk events galore
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD: One more possibility around year-end for testing of 1.20 – Danske Bank
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold looks to the upside ahead of Powell’s speech
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Cautious mood and “sell the fact” after Trump's discharge, stimulus news eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Markets hate uncertainty
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Euro attacks strong resistance, why this could be a fakeout
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: High hopes for US fiscal stimulus boost sentiment, NFP hints eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar rises after an ugly presidential debate, US data, end-of-month flows eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD now looks to 1.1800 and above – UOB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
S&P 500: Three critical policy disappointments behind the correction – Morgan Stanley
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin's mass adoption passes the point of no return
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar declines on hopes for a US fiscal deal, ahead of presidential debate
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
US Elections: A decisive Democratic victory to hit the USD – Nordea
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Bearish pressures mounting
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar bulls take a breather amid an upbeat start to a Big week
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – Let the debates begin!
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Price Prediction: BTC slips into “Buy the Dip” Zone
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold: Eyes on August lows of $1863 ahead of US PMIs and round two Powell
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US dollar’s haven demand in vogue ahead of a busy day
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold remains on track to test the August low of $1863
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Bears now eyeing a sustained break below 1.1700 mark
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar buoyant ahead of Powell, UK PM Johnson’s COBRA meeting eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Futures: Still room for extra gains
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Further consolidation looks likely ahead of Fed speakers
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: US dollar sags amid fiscal overhang, mounting coronavirus risks
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – No ease up for Powell
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
BOE Quick Analysis: Bailey blasts sterling with specter of negative rates, why more falls are likely
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s De Guindos: Euro exchange rate is fundamental for inflation
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Fed drives dollar higher, gold and stocks lower, BOE, jobless claims eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold aims $1980 as focus shifts to Wednesday’s FOMC
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
GBP/USD to surge to 1.40 by September-2021 – UBS
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Upbeat Chinese data boosts mood, Boris' bill passes first hurdle, Gold shines
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead – More stimulus on the way?
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB's Lane: Euro's rise dampens inflation outlook
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: King dollar holds the rein amid cautious optimism, eyes on US CPI
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD Forecast: Euro set to fall? ECB expectations may be overconfident
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Brexit in deep crisis, vaccine hopes resurface, all eyes on the ECB
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Brent Oil resumes its core bear trend
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
ECB’s Muller: A timely exit from temporary emergency measures is important
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Vaccine trial halt exacerbates risk off mood, Brexit, BOC, and US fiscal talks eyed
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: XAU/USD drops further and approaches $1,900/oz
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Bitcoin Price Update: BTC bulls ready to strike back once $11,000 is cleared
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Hard-Brexit fears pound the Pound, Dollar bid on US-Sino woes
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
EUR/USD risks deeper pullback as 1.20 peak looks far
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Gold Price Analysis: Downside appears more compelling while below $1946 – Confluence Detector
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Today: Dollar stabilizes in the NFP aftermath, Oil tumbles amid holiday-thinned trading
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Forex Week Ahead - Trump Closing the Gap
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613
Market Analysis
Nonfarm Payrolls Preview: Fed’s policy shift to introduce vital noise
https://secure.gravatar.com/avatar/b23a9c274f4a28b6ab7acddb98b80613