The ECB decision at 12.45 and the press conference 45 minutes later will be the main focus today. With Februaryís inflation marginally stronger than anticpated at 0.8%, expectations that the ECB would be rushed into further policy stimulus at this meeting have faded. Yet with further disinflation expected, the debate about further stimulus is likely to persist. The problem for the ECB is that there are few easy options left. The refi rate is already too low to provide additional meaningful stimulus. We also doubt the ECB will reduce its deposit rate to negative territory. Some officials have been discussing ceasing sterlising the ECBís Securities Market Programme holdings. This would in effect be quantitative easing. With pressure for immediate action reduced, we think policy will be unchanged today. But the press conference will be interesting to guide the immediate outlook. ...
Lloyds Bank Daily Economic Outlook
GVI Forex Jay Meisler 10:37:27 GMT - 03/06/2014
This covers the possible ECB moves
Quotes from RBC Capital Markets:
-EUR: There are many balls in the air heading into today's ECB meeting, but the FX market reaction will generally be driven by three factors (1) the refi rate announcement (2) the deposit rate announcement (3) the rest, that all comes in the press conference 45 minutes later. On the refi rate, RBC is with the minority view that the ECB will cut today (25% of analysts expect either a 10 or 15bp cut).
-As was the case with the unexpected cut in November, however, any resulting EUR weakness will likely be short-lived and particularly so if the market perceives a refi rate cut as a substitute for more aggressive easing. A depo rate cut (expected by almost no one - just one economist the Bloomberg survey) would clearly be a much more negative development.
-At the press conference there are more variables to consider. Halting sterilisation of the SMP bond holdings is widely, though not universally, expected. Such a move would have limited practical consequences, amounting to just 2% of EZ nominal GDP or 3% of outstanding government bonds.
-For comparison, the Fed, BoE and BoJ QE programmes are all 10 to 15 times bigger on both ratios. As a signal that previously unpalatable policy options are now open, however, EUR might take this news more negatively. As well as other possible liquidity measures, the final factor to watch is the 2016 inflation forecast (the first time the ECB has published one) where a central projection below 1.6-1.7% would be taken as signaling the risk of more easing in the future.
Source: FXWire Pro - Research & Analysis
jkt abel 10:34:18 GMT - 03/06/2014
agree, anything about cuts or easing from ECB is nonsense, EU is just about Germany, the rest is nonexistent.
GVI Forex Blog 10:23:29 GMT - 03/06/2014
HIGH IMPACT ITEMS: GB- Bank of England, European Central Bank, US- Productivity, Weekly Jobless, Factory Orders, Natural Gas, CA- Ivey PMI
The outlook for the ECB policy decision today is mixed. Some expect a policy easing, but I expect no rate changes or QE. Flash February Eurozone HICP data ticked and the German Bundesbank is said not to favor of a rate cut.
Mon 27 May 2019 AAGB/US- Holiday Tue 28 May 2019 A 14:00 US- Consumer Confidence C 13:00 US- Case-Shiller Wed 29 May 2019 A 08:55 DE- Employment AA 18:00 US- BOC Decision A 18:30 US- EIA Crude Thu 30 Mar 2019 AAEZ/CH- Holiday A 12:30 US- Weekly Jobless Fri 31 Mar 2019 AA 10:00 EZ- Flash HICP A 12:30 US- Personal Income, Spending, Deflator AA 14:00 US- Final Univ of Michigan
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