empty
 
 
13.09.2019 08:59 AM
Euro remains in range after ECB meeting, pound takes a break

Core inflation in the United States reached 2.4% y/y in August, which was the highest level in 10 years. Growth exceeded forecasts despite the fact that the forecasts were quite optimistic.

This image is no longer relevant

First of all, the growth of price is supported by the services sector, while commodity components show noticeably weaker dynamics. If we proceed from the fact that Trump's war for higher import tariffs will have the expected effect, then we can assume an increase in commodity prices. These considerations should support inflationary expectations. But the oddity is that Tips' 5-year inflation-protected bond yields are still around a 12-month low, indicating strong business skepticism about inflationary expectations.

Apparently, markets do not expect a hawkish bias from the upcoming FOMC meeting. So, the demand for risky assets will continue with high probability next week.

EURUSD pair

The ECB kept the base rate at zero and at the same time lowered the rate on deposits by 0.1%, which is already expected at the meeting that ended on Thursday. The asset repurchase program has also been resumed, but monthly purchases will total only 20 billion euros per month, while 30 or even 40 billion was expected.

The euro reacted to the outcome of the meeting with growth as the ECB's decision looked less dovish as a whole than predicted, but then it went down.

After Mario Draghi noted that the likelihood of a recession is low, the euro began to move up, having recovered all the losses. Indeed, despite the fact that the yield of 10-year-old Bundes is below zero, the spread between 2- and 10-year-old bonds is still above zero, unlike American Treasuries, and consumer confidence, although it is in a long-term downtrend, in the last two year shows the reverse dynamics.

This image is no longer relevant

In fact, the euro did not receive directions to the direction after the ECB meeting. The buyback program has nevertheless been resumed, and relatively small volumes may be increased at any time if circumstances so require. The fears of relatively low inflation are largely due to the low price of energy, Draghi emphasized at a press conference. Meanwhile, core inflation is still high and is predicted to drop to 1.5% in 2021.

In general, the ECB gave a neutral characterization of the state of affairs in the eurozone, but most regional banks are preparing for a darker scenario. In particular, Nordea Bank believes that the ECB will reduce the deposit rate by another 10p in December and expand its asset purchase program to 40 billion per month. DanskeBank notes the obvious risks that the market will come to the conclusion that the measures taken are not enough to revive inflationary expectations and growth, which will then proceed from the need to expand the incentive program that confirms the position of Nordea. Well, the head of Deutsche Bank Christian Seving did say that "... in the long term, negative rates lead to the collapse of the financial system ...", European banks will receive losses of hundreds of millions of euros this year only in the reduction of the deposit rate.

In general, it is currently necessary to proceed from the fact that the ECB was able to launch an incentive program while maintaining the euro quotes at the same level. Despite the chaotic movements of the euro, it did not go beyond the horizontal boundary of 1.0920-1.1085, and expectations remain neutral as of Friday morning. Before the Fed meeting, the euro will continue to trade in a range and an attempt to go up will most likely be stopped at the border of the long-term channel at 1.11.

GBP/USD pair

The pause in the political show regarding Brexit and the lack of significant macroeconomic news contribute to reducing the pound's volatility. A weak upward trend remains and the pound will tend to move towards the area of 1.2380/2430. There are no reasons for a downward turn yet.

Kuvat Raharjo,
Chuyên gia phân tích của InstaForex
© 2007-2024
Kiếm lợi nhuận từ những biến đổi giá của tiền điện tử với InstaForex.
Tải MetaTrader 4 và mở giao dịch đầu tiên của bạn.
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    THAM GIA CUỘC THI
  • Tiền gửi lần truy cập
    Ký quỹ tài khoản của bạn với $3000 và nhận được $1000 nhiều hơn!
    Trong Tháng 02 chúng tôi xổ $1000 trong chiến dịch Chancy Deposit!
    Có được một cơ hội giành chiến thắng bằng việc ký quỹ $3000 vào một tài khoản giao dịch. Đáp ứng được điều kiện này, bạn trở thành một người tham gia chiến dịch.
    THAM GIA CUỘC THI
  • Giao dịch khôn ngoan, thành công
    Nạp tiền vào tài khoản của bạn với ít nhất $ 500, đăng ký cuộc thi và có cơ hội giành được các thiết bị di động.
    THAM GIA CUỘC THI
  • 100% tiền thưởng
    Cơ hội duy nhất của bạn để nhận 100% tiền thưởng khi gửi tiền
    NHẬN THƯỞNG
  • 55% Tiền thưởng
    Đăng ký tiền thưởng 55% cho mỗi lần gửi tiền của bạn
    NHẬN THƯỞNG
  • 30% tiền thưởng
    Nhận 30% tiền thưởng mỗi khi bạn nạp tiền vào tài khoản của mình
    NHẬN THƯỞNG

Các bài báo được đề xuất

Không thể nói chuyện ngay bây giờ?
Đặt câu hỏi của bạn trong phần trò chuyện.
Widget callback