Euro, Sentiment Trends Hinge on ECB Readiness to Boost Stimulus

2016-04-21 05:56:00

Talking Points:

ECB unlikely to deliver policy change at today’s announcement
Draghi presser in focus for guidance on future easing potential
Markets likely to be disappointed absent strong dovish rhetoric

The monetary policy announcement from the European Central Bank headlines the economic calendar. Economists expect officials will leave the current settings unchanged this time around. Traders’ priced-in bets implied in EONIA futures agree. This makes sense: the ECB announced forceful stimulus expansion last month and will likely want to monitor progress for at least a few months before deciding on whether further measures are necessary.

With that in mind, comments from ECB President Mario Draghi at the press conference following the announcement may nonetheless trigger volatility. The Euro rallied even as the ECB eased further last month as Mr Draghi appeared to close the door for further accommodation, implying the central bank was out of ammunition. Subsequent commentary clarified that he was referring to a shift away from deposit rate cuts toward other measures, but this seemed to be mostly ignored.

Today’s meeting offers Draghi an opportunity to formally clarify forward guidance. If he uses it to unambiguously assert that the ECB is well-armed to deliver greater easing and is prepared to do it on short notice if necessary, the Euro is likely to weaken. Risk appetite may also improve, sending the Australian, Canadian and New Zealand Dollars higher alongside stock prices. The absence of a forceful dovish message may leave investors disappointed however, triggering the opposite results.

Are FXCM traders buying or selling the Euro ahead of the ECB rate decision? Find out here !

Asia Session

GMT	CCY	EVENT	ACT	EXP	PREV
22:00	NZD	ANZ Job Advertisements (MoM) (MAR)	2.9%	-	1.2%
22:45	NZD	Net Migration SA (MAR)	5330	-	6000
01:00	NZD	ANZ Consumer Confidence Index (APR)	120	-	118
01:00	NZD	ANZ Consumer Confidence (MoM) (APR)	1.7%	-	-1.4%
01:30	AUD	NAB Business Confidence (1Q)	4	-	5
01:30	AUD	RBA FX Transactions Government (MAR)	-978m	-	-496m
01:30	AUD	RBA FX Transactions Market (MAR)	945m	-	476m
01:30	AUD	RBA FX Transactions Other (MAR)	44m	-	41m
02:00	CNY	Bloomberg April China Economic Survey (APR)	-	-	-
03:00	NZD	Credit Card Spending (MoM) (MAR)	-1.1%	-	-0.5%
03:00	NZD	Credit Card Spending (YoY) (MAR)	4.8%	-	7.3%
05:00	JPY	Supermarket Sales (YoY) (MAR)	-0.3%	-	3.4%

European Session

GMT	CCY	EVENT	EXP	PREV	IMPACT
06:00	CHF	Trade Balance (MAR)	-	4.07b	Low
06:00	CHF	Exports Real (MoM) (MAR)	-	2.8%	Low
06:00	CHF	Imports Real (MoM) (MAR)	-	-2.0%	Low
07:00	CHF	Money Supply M3 (YoY) (MAR)	-	1.7%	Low
08:30	GBP	Retail Sales Ex Auto Fuel (MoM) (MAR)	-0.3%	-0.2%	Medium
08:30	GBP	Retail Sales Ex Auto Fuel (YoY) (MAR)	3.8%	4.1%	Medium
08:30	GBP	Retail Sales Inc Auto Fuel (MoM) (MAR)	-0.1%	-0.4%	Medium
08:30	GBP	Retail Sales Inc Auto Fuel (YoY) (MAR)	4.4%	3.8%	Medium
08:30	GBP	Public Finances (PSNCR) (MAR)	-	0.1b	Low
08:30	GBP	Central Government NCR (MAR)	-	-0.5b	Low
08:30	GBP	Public Sector Net Borrowing (MAR)	5.4b	6.5b	Low
08:30	GBP	PSNB ex Banking Groups (MAR)	6.0b	7.1b	Low
09:00	EUR	Eurozone Gov’t Debt/GDP Ratio 2015	-	92.1%	Low
11:45	EUR	ECB Main Refinancing Rate (APR 21)	0.00%	0.00%	High
11:45	EUR	ECB Deposit Facility Rate (APR 21)	-0.40%	-0.40%	High
11:45	EUR	ECB Marginal Lending Facility (APR 21)	0.25%	0.25%	High
12:30	EUR	ECB's Draghi Holds Press Conference	-	-	High