The ECB policy announcement takes centre stage today. At last month’s post-decision press conference, ECB President Draghi suggested the Bank would be ‘comfortable’ with loosening policy at this month’s meeting, largely on the back of subdued inflation. Subsequent comments by Council members, as well as this week’s disappointing inflation and sluggish GDP figures, have further cemented expectations of easing. Our global team expect the main refinancing rate to be cut by15bps to 0.1%, as well as reductions to the marginal lending and deposit rates, which would see the latter falling into negative territory. The Council could announce a range of other measures, including further liquidity provisions such as a longer-dated long-term refinancing operation (LTRO) aimed at boosting bank lending. German factory orders and euro area retail sales for April will be released before the ECB announcement
Lloyds Bank Daily Economic Outlook
Minneapolis DRS2 03:01:44 GMT - 06/05/2014
On the daily charts, EUR/USD is on a downtrend...steep at first, but slowing down near 1.36xx. A small short from 1.3630 or so might make a decent profit, but beware of a short squeeze. The past 3 weeks or so of shorts could provide incredible fuel for a long.
Mtl JP 01:14:54 GMT - 06/05/2014
haha... wrong guess JM
wanna try again?
2 tries left
NY JM 01:12:59 GMT - 06/05/2014
JP where is your sell order - I call this a hope trade
Mtl JP 01:10:41 GMT - 06/05/2014
john 11:15 - lets just say that at 1.36 euro is proving itself hardy.
as usual. because every monkey and his uncle knows - i.e has priced in - a cut to the refi rate, a -tive deposit rate and some sort of a convoluted lending program to loosen up credit where (semi)govt geniuses judge it needed...
Noe it is up to Mario to DISAPPOINT. Preferably massively coz I have an order waiting.
Would you like to know what it is ?
Or prefer to guess at it ?
GVI Forex Jay Meisler 21:49:06 GMT - 06/04/2014
Anyone care to pose a scenario for the ECB meeting?
1.36 just traded for the 8th day in a row so that will be a level that sets the bias going forwards. I have a theory on why these big figures keep attracting/consolidating. Contact me if you want my view on it.
GVI Forex Jay Meisler 11:41:06 GMT - 06/04/2014
it may come down to where stops are resting. Suggest watching my video. 2 weeks within 1.3584-1.3688.
COT is what it is. I don't believe the CFTC is going to change it anytime soon.
My point is that the ECB has provided a lot of forward guidance about what will be announced in about 24 hours, and any trader with a pulse will be positioned the way they want to be into the announcement.
We are now at the point of handicapping the likely REACTION to the news assuming most people have a correct notion of whats going to be released.
Mtl JP 10:56:41 GMT - 06/04/2014
john 09:17 - Re "markets are now positioned the way they want to be" - is that a COT preview that will become public on Friday ?
GVI Forex john 09:17:41 GMT - 06/04/2014
Its my view that markets are now positioned the way they want to be into the ECB decision tomorrow. Rate cuts seem to be a given and another LTRO would not ruffle a lot of feathers. As for QE, Its my sense that aggressive steps are still unlikely.
Bottom-line, the market is set up for ECB ease and this leaves a lot of room for disappointment if the central bank does not surprise us.
The odd question is whether not enough action to promote growth will lead to a STRONGER EURUSD? Before the ECB follies on Thursday we get the unpredictable ADP private employment survey from the U.S. on the N.Y. open today. A strong report should be USD supportive. Street expectations for the data are modest.
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