It's all about the ECB meeting today at 23:45 AEST, followed by Mario Draghi's press conference at 00:30. The fact EUR/USD didn't rally overnight despite poor US data suggests the market is positioning for dovish action. For me, the main issues to look for would be a cut to the refinancing rate from twenty-five basis points to say ten basis points. The idea here is to limit the upside in EONIA (interbank lending rates) rates. There is also a lot of talk about not sterilising the bonds it's purchased through its Securities Market Program (SMP) during 2012. This would cap gains in the EUR as it could see its balance sheet expand by around 6%. We also need to look out for revisions to its economic projections and any material downgrade to its inflation forecasts could be bearish. The risk/reward trade is certainly to be long
Chris joined IG as a sales trader in 2006, having worked previously at Morgan Stanley, Credit Suisse and Merrill Lynch, gaining exposure to both equity and fixed income trading. After accruing 15 years' experience in financial markets, Chris...
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Really enjoying these morning summaries Chris.