• In what could be the event of the month, if not the year, Maria Draghi’s ECB threw caution to the wind by cutting interest rates to zero, expanding Quantitative Easing and providing negative interest rate loans to banks. The latter effectively means the ECB is paying Eurozone lenders to provide credit to households. Markets did not know what to make of this initially, with the Euro first plunging by over 1% only to recover and post sizeable gains. Stock markets had an opposite reaction, with the main indices closing lower. Confusion reigns as to what is going on here – Some have interpreted this as the markets believing the rate cutting cycle is over in Europe, while others believe it could be markets thinking ‘you know, this could work’ and pricing in a Euro recovery.
• This morning, the Euro is down slightly, but will have some way to go to erase yesterday’s gains.
• By contrast, the US Dollar is down slightly again.
• Oil prices dipped slightly yesterday, but remain within a days session of $40 again.
• Other currency moves were relatively muted yesterday, with the AUD/JPY continuing its recent strong run.
Coming up today:
• Today we have UK trade balance at 09.30.
• From 13.30, we have Canadian employment change data released alongside the unemployment rate.
• US import prices are released at 13.30.
Trade Idea:
• The reaction to Draghi’s plans has been spectacular, but central banking moves have often been undone in recent times, especially when they lack specific details as yesterday’s plans have been accused of.
• As such, there’s an outside chance, we could see a counter-reaction on the EUR/USD.
Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.
ECB Cuts to Zero,
Markets Go Crazy
Morning Report: 06.30 London
• In what could be the event of the month, if not the year, Maria Draghi’s ECB threw caution to the wind by cutting interest rates to zero, expanding Quantitative Easing and providing negative interest rate loans to banks. The latter effectively means the ECB is paying Eurozone lenders to provide credit to households. Markets did not know what to make of this initially, with the Euro first plunging by over 1% only to recover and post sizeable gains. Stock markets had an opposite reaction, with the main indices closing lower. Confusion reigns as to what is going on here – Some have interpreted this as the markets believing the rate cutting cycle is over in Europe, while others believe it could be markets thinking ‘you know, this could work’ and pricing in a Euro recovery.
• This morning, the Euro is down slightly, but will have some way to go to erase yesterday’s gains.
• By contrast, the US Dollar is down slightly again.
• Oil prices dipped slightly yesterday, but remain within a days session of $40 again.
• Other currency moves were relatively muted yesterday, with the AUD/JPY continuing its recent strong run.
Coming up today:
• Today we have UK trade balance at 09.30.
• From 13.30, we have Canadian employment change data released alongside the unemployment rate.
• US import prices are released at 13.30.
Trade Idea:
• The reaction to Draghi’s plans has been spectacular, but central banking moves have often been undone in recent times, especially when they lack specific details as yesterday’s plans have been accused of.
• As such, there’s an outside chance, we could see a counter-reaction on the EUR/USD.
A good way to play this is a ONE TOUCH trade predicting that the EUR/USD will TOUCH 1.1000 within the next 10 days for a potential return of 113%.
Disclaimer: This financial market report is intended for educational and information purposes only. It should not be construed as investment or financial advice and you should not rely on any of its content to make or refrain from making any investment decisions. The views expressed in this report are those of the author and do not necessarily reflect the views or position of Binary.com accepts no liability whatsoever for any losses incurred by users in their trading. Binary options trading may incur losses as well as gains.
Email [email protected] or skype me at bomaffiliates-karen
Related Posts: