Euro May Face Volatility Despite ECB Inaction
The ECB monetary policy announcement headlines the economic calendar in European trading hours. Euroarea financial conditions have stabilized having recovered from stress in the aftermath of the UK “Brexit” referendum. Meanwhile, the year-on-year inflation rate has drifted toward the top the range prevailing since mid-2015 having steadily improved since April. On balance, this hints that policymakers probably don’t feel pressured to expand an already aggressive monetary stimulus effort that includes hefty asset purchases and a negative deposit rate.
The announcement may still generate volatility however. First, the updated set of macroeconomic projections prepared by ECB staff may be telling, with the direction of revisions hinting which way the central bank may steer in the months ahead. A downgrade of the inflation outlook may imply that further easing is on the horizon and weigh on the Euro. Needless to say, an upgrade that undermines the case for near-term stimulus expansion could have the opposite effect.
Second, investors will look for clues about potential changes in policy implementation as ECB President Draghi gives a press conference following the announcement. The central bank is soaking up so much paper as to spark concerns about insufficient liquidity in those assets it has deemed acceptable for purchase. If policymakers’ promise to boost accommodation as needed is to be seen as credible, they may need to expand the range of securities that qualify. Doing so or signaling such a step is imminent may be enough to put pressure on the single currency.
Are retail traders buying or selling the Euro ahead of the ECB announcement? Find out here.
Asia Session
|
GMT |
CCY |
EVENT |
ACT |
EXP |
PREV |
|
22:55 |
RBA's Lowe Intro Remarks at Conference |
- |
- |
- |
|
|
23:01 |
RICS House Price Balance (AUG) |
12% |
2% |
5% |
|
|
23:50 |
BoP Current Account Balance (¥) (JUL) |
1938.2B |
2073.3b |
974.4b |
|
|
23:50 |
JPY |
BoP Current Account Adjusted (¥) (JUL) |
1447.8B |
1573.7b |
1648.4b |
|
23:50 |
JPY |
Trade Balance BoP Basis (¥) (JUL) |
613.9B |
571.2b |
763.6b |
|
23:50 |
JPY |
GDP SA (QoQ) (2Q F) |
0.2% |
0.0% |
0.0% |
|
23:50 |
JPY |
GDP Annualized SA (QoQ) (2Q F) |
0.7% |
0.2% |
0.2% |
|
23:50 |
JPY |
GDP Nominal SA (QoQ) (2Q F) |
0.3% |
0.2% |
0.2% |
|
23:50 |
JPY |
GDP Deflator (YoY) (2Q F) |
0.7% |
0.8% |
0.8% |
|
23:50 |
JPY |
GDP Private Consumption (QoQ) (2Q F) |
0.2% |
0.2% |
0.2% |
|
23:50 |
JPY |
GDP Business Spending (QoQ) (2Q F) |
-0.1% |
-0.4% |
-0.4% |
|
23:50 |
JPY |
Bank Lending Incl Trusts (YoY) (AUG) |
2.0% |
- |
2.1% |
|
23:50 |
JPY |
Bank Lending Ex-Trusts (YoY) (AUG) |
2.0% |
2.0% |
2.1% |
|
01:30 |
AUD |
Trade Balance (JUL) |
-2410m |
-2700m |
-3250m |
|
02:00 |
JPY |
Tokyo Avg Office Vacancies (AUG) |
3.90% |
- |
3.94% |
|
02:35 |
CNY |
Trade Balance (CNY) (AUG) |
346.03b |
373.00b |
342.80b |
|
02:35 |
CNY |
Exports (CNY) (YoY) (AUG) |
5.9% |
2.9% |
2.9% |
|
02:35 |
CNY |
Imports (CNY) (YoY) (AUG) |
10.8% |
0.7% |
-5.7% |
|
02:41 |
CNY |
Trade Balance ($) (AUG) |
52.05b |
58.85b |
52.31b |
|
02:41 |
CNY |
Exports ($) (YoY) (AUG) |
-2.8% |
-4.0% |
-4.4% |
|
02:41 |
CNY |
Imports ($) (YoY) (AUG) |
1.5% |
-5.4% |
-12.5% |
|
04:30 |
JPY |
Bankruptcies (YoY) (AUG) |
14.87% |
- |
-9.52% |
|
04:30 |
JPY |
BOJ’s Nakaso Speaks in Tokyo |
- |
- |
- |
|
05:00 |
JPY |
Eco Watchers Survey: Current (AUG) |
45.6 |
45.5 |
45.1 |
|
05:00 |
JPY |
Eco Watchers Survey: Outlook (AUG) |
47.4 |
46.4 |
47.1 |
European Session
|
GMT |
CCY |
EVENT |
EXP |
PREV |
IMPACT |
|
|
06:00 |
German Labor Costs (YoY) (2Q) |
- |
3.1% |
Low |
||
|
06:00 |
EUR |
German Labor Costs (QoQ) (2Q) |
- |
1.7% |
Low |
|
|
11:45 |
EUR |
ECB Main Refinancing Rate (SEP 8) |
0.00% |
0.00% |
High |
|
|
11:45 |
EUR |
ECB Deposit Facility Rate (SEP 8) |
-0.40% |
-0.40% |
High |
|
|
11:45 |
EUR |
ECB Marginal Lending Facility (SEP 8) |
0.25% |
0.25% |
High |
|
|
11:45 |
EUR |
ECB Asset Purchase Target (SEP) |
€80b |
€80b |
High |
|
|
12:30 |
EUR |
ECB President Draghi Holds Press Conference |
- |
- |
High |
|
Critical Levels
|
CCY |
Supp 3 |
Supp 2 |
Supp 1 |
Pivot Point |
Res 1 |
Res 2 |
Res 3 |
|
1.1162 |
1.1204 |
1.1222 |
1.1246 |
1.1264 |
1.1288 |
1.1330 |
|
|
1.3123 |
1.3245 |
1.3293 |
1.3367 |
1.3415 |
1.3489 |
1.3611 |
Disclosure: None.
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