The overall market sentiment is mixed as new virus cases continue rising throughout the world, but most economic indicators came out better than analysts expected. Let’s look at the main market movements.
How to trade EUR after the ECB rate statement?
Information is not investment advice
The European Central Bank will publish the main refinancing rate and make a statement on Thursday, June 4, at 14:45 MT time. Also, the ECB press conference will be later at 15:30 MT time.
Instruments to trade: EUR/USD, EUR/CAD, EUR/GBP, EUR/JPY, EUR/NZD, EUR/AUD, EUR/CHF
Analysts give 99% that the main refinancing rate will stay unchanged. Traders should focus on the ECB statement and the press conference. The central bank will reveal the market overview and give its forecast. It’s important what officials think about the future recovery as it will drive EUR. The central bank’s main weakness is a risky nature of its debt. However, the ECB with Merkel and Macron tackled it and unleashed a 750 billion-euro emergency asset-purchase program with 500 billion as grants and the rest as loans. It helped to prevent borrowing costs from going out of control. Economists expect the program to be topped up.
If the ECB leaves everything unchanged or expands quantitative easing, EUR may fall.
If the ECB increases the size of the pandemic emergency purchase program (PEPP) or targeted longer term refinancing operations (LTRO), EUR can rise.
The market sentiment switched to risk-off after the Fed’s Powell statement. The USD edged higher, while risker assets started falling after reaching quite high levels. Let’s have a closer look.
The overall market sentiment is mixed as investors await the Federal Reserve’s statement today at the evening.
The market sentiment is indeed risk-on today. Stocks, riskier currencies and gold are rising amid the waning US dollar.
The US NFP will be published on August 7 at 15:30 MT time.
The RBA will make a rate statement on August 4 at 7:30 MT time.