• Economists are forecasting a 95-97% probability that the ECB holds its policy (rates, stimulus) steady
• Heavy expectations create scenarios were the unexpected generates heavy volatility
• A 'status quo' outcome offers few, high-potential trades; while easing offers many including EURUSD
Watch the ECB rate decision outcome and market impact live on DailyFX with Christopher Vecchio.
Economists - and by proxy the market - are adamant in their expectations for the ECB to hold its bearing on interest rates and unorthodox stimulus. Yet, from certainty arises surprise and volatility. Looking at Bloomberg's and Reuters' polls, the level of expectation for the central bank to ignore soft inflation figures and questionable growth forecasts and maintain their policy bearings is near certainty. Not only does the recent trend in data deserve greater respect, but President Draghi may also establish a more favorable tone to future moves in his press conference. We discuss the scenarios of this event risk and favored setups among EURUSD, EURAUD and EURGBP amongst others in today's Strategy Video.
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