Markets look to ECB interest rate meeting

October 26, 2017

Plenty of data to be released later tonight and in the early hours of tomorrow morning, with most interest surrounding the ECB interest rate meeting.

The EUR/USD spiked overnight, despite strong US data. It is now trading in the $1.18 range, where it is currently at $1.1816. This is up from the $1.1769 level it was at this time yesterday. The GBP/USD also spiked overnight, which leads us to believe that a weakening USD was the cause of the currency fluctuation. The pair is presently at $1.3265, up from $1.3132 this time yesterday.

It was not a pleasant night for markets, as all major US and European indexes gave up ground last night. US all ended the session around half a percent down. The NASDAQ lost 34.54 points (-0.52%) to close at 6,563.89. The Dow, having its worst day since September 5, retreated 112.30 points (-0.48%) to end the session at 23,329.46. The S&P 500 was the best of the bad US bunch, shedding 11.98 points (-0.47%) to 2,557.15. European stocks were hammered overnight, with the FTSE losing more than 1% of its value. It closed the session down 79.33 points (-1.05%) to 7,447.21. Th DAX dropped 59.78 points (-0.46%) to close back under the 13,000 mark, to 12,953.41.

Gold failed to capitalise on falling equities, barely scraping back above $1,280. It is currently trading at $1,280.30. Despite all major US and European stocks losing ground, the precious metal was only able to add $2 from this time yesterday.

Turning to today’s events and the most significant event occurring is the Minimum Bid Rate (interest rate announcement) and the ECB Press Conference. As we know, interest rate meetings are always crucial as they greatly affect the economic outlook of a country (or in this case, a continent). While the interest rate may stay on hold, it is important to analyse the language that is used so that investors can get some sort of indication from central bankers on what the future of money policy will look like.

Other announcements today include:

Japan – SPPI

Australia – Import Prices, RBA Assistant Governor Guy Debelle speaks

UK – CBI Realised Sales

Europe – M3 Money Supply, Private Loans

US – Unemployment Claims, Good Trade Balance, Prelim Wholesale Inventories, Pending Home Sales, Natural Gas Storage