ECB interest rate meeting in focus

March 8, 2018

The week has built up nicely as we head towards the weekend, with a stack of data set for release today.

The EUR/USD remained mainly flat throughout the session, with some peaks and troughs in between. The pair remained flat early, before reaching session highs of $1.24442. From that point, it showed some signs of weakness as it dropped as low as $1.23844. It regained some of those losses to be currently trading at $1.24100, near where it opened at yesterday. The GBP/USD followed a similar pattern as the euro, peaking at $1.39117 early before weakening to session lows of $1.38455. It has clawed back most of those losses, currently trading at $1.39028.

The Dow was a strange beast yesterday, opening 300 points lower than its close from the previous session. It fell further in the opening two hours of trading, falling as low as 24,413.90. It mounted a spirited recovery, gaining around 400 points, falling almost 300 points, then clicking into gear to reach session highs of 24,846.60. It is currently trading at 24,787.90. The Dax was stoic last night as it weathered everything that the market threw at it. It reached a low of 11,971.72 in the first hour of trading, but it was basically all up from there. It steadily posted gains as the hours ticked by, eventually hitting highs of 12,278.60. It is not far off those highs, currently trading at 12,261.80.

Looking ahead at the events of today and the most significant is the ECB interest rate meeting. While it not expected to be lifting interest rates, it will be important for traders to observe the commentary around economic outlook given by policymakers. This has taken on even more importance considering Donald Trump is looking at implementing tariffs on imported steel and aluminium. This plan could cause the EU to enter a trade war, which the ECB will be aware of and may take it into consideration when developing their economic forecasts. Other data set for release today includes:

Australia – Trade Balance

China – Trade Balance, USD-Denominated Trade Balance

Japan – Economy Watchers Sentiment

US – Challenger Job Cuts, Unemployment Claims, Natural Gas Storage

Europe – ECB Press Conference, Swiss Unemployment Rate, German Factory Orders

Canada – Housing Starts, Building Permits, NHPI, BoC Governor Stephen Poloz & Deputy Governor Timothy Lane speak


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