Angry Draghi

By GG Analyst in Reviews 0 Comment

EUR/USD

Are there many retailers remaining in the ranks after yesterday’s speech of Draghi? Probably, only those, who have a year or so of experience in trading payrolls. This is the common case there: a 100bp thorn in one direction and then a sharp reversal down by 200bp. Yesterday the markets did a greater job. The euro/dollar was purchased after sell-offs on the Fed’s meeting minutes, so the pair managed to grow from 1.2220 to 1.23. Some traders staked on the probability of the rate cut by a fourth of a point, so the message that the rate was kept unchanged was more…

Suffering manufacture

By GG Analyst in Reviews 0 Comment

EUR/USD

The Fed preferred not to rush headlong into the fight. Yesterday’s commentary highlighted the same disappointing aspects like slowdown in the employment growth, high level of unemployment, low spending, depression of the housing market and pointed out the same favourable processes like larger business investments and inflation slowdown with steady inflation expectations. Interesting enough, but the committee mentioned that with such growth rate the return to the normal employment level would take too much time. The final statement about the FOMC’s intention to provide additional accommodation as needed to promote a stronger economic recovery and sustained improvement in labor market conditions more…

Don’t have great expectations of today’s FOMC

By GG Analyst in Reviews 0 Comment

EUR/USD

Last week’s rally was supported by the markets partly on expectations of further actions from two largest CBs – the ECB and Fed. However, Friday’s data on the GDP level and other relatively neutral statistics made the markets temper their expectations. In the anticipation of the Fed’s meeting minutes the average market forecast is inclined towards the status-quo preservation. Almost 90% of economists and market analysts, surveyed by Bloomberg, don’t expect the launch of QE3 today. It is believed that tonight the Fed will highlight the ways to ease the policy, changing some phrases in the commentaries, but will take real more…

The market is pricing in the ECB’s QE

By GG Analyst in Reviews 0 Comment

EUR/USD

There are good and bad news concerning the ECB. Good news is that the market is still cherishing hopes for bold moves on the part of Draghi. Much is expected to be done, including quantitative easing (unsterilized bond purchases). Such steps will slightly push the boundaries of the mandate, but hardly anyone will penalize the CB, which tries to preserve the EU integrity while nobody else cannot or doesn’t want to do that. Bad news is that the process of negotiating and setting up of the bazooka may take much time. Those, who have been expecting to see some action from more…

Wearied after the rally

By GG Analyst in Reviews 0 Comment

EUR/USD

Last week abounded in heavyweight economic events, and the current one promises to be even more nervous. Draghi pledged to do his best to protect the euro. Already on Thursday he will have this opportunity when announcing the decision on the ECB’s monetary policy. Now the most probable turn of events is that the CB will buy bonds of ESM/EFSF. However, there are a few forecasts that suggest the rate cut. It’s worth mentioning that the cut of the official bank rate will lead to the negative rate on the ECB’s deposits. This means that the banks will have to pay more…