The European Central Bank will be holding a policy meeting today and is expected to cut its Main Refinancing Rate by 0.25% to 2.65%.
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- Today’s agenda in the Forex market is dominated by the European Central Bank’s policy meeting, at which it is expected to announce a rate cut of 0.25%. It would be very surprising if this cut were not made today, as the Euro has gained very strongly in recent days due to the trade war centered on the USA.
- The trade war continues, with negotiations ongoing but few obvious results, although the USA has exempted automobile imports from Canada from the 25% tariff. Despite that, stock markets seem to have stabilized and found support, with price action suggesting buying at recent lows for both the tech-based NASDAQ 100 Index and the broader S&P 500 Index.
- In the Forex market, the EUR/USD and GBP/USD currency pairs are looking very bullish after continuing to rise strongly to reach new multi-month highs. Both are holding their value in early trading today. Notably, the Japanese Yen has not been advancing as strongly, even though the Japanese 10-year yield just reached its highest value since 2008. The US Dollar has been the strongest major currency since today’s Tokyo open, while the Japanese Yen has been the weakest, although the values are not strong enough to be significant. The EUR/USD and GBP/USD currency pairs are in focus due to the strong gains they have made over recent days.
- Natural Gas futures are still looking bullish, so will be of interest to trend traders.
- Gold is holding up quite well despite widespread strong selloffs in commodities, strongly outperforming Silver despite the typical strongly positive correlation between the two precious metals.
- Bitcoin is trading above $90,000 again so is looking stronger and less bearish.
- The ADP Non-Farm Employment Change forecast came in much lower than expected, seeing a likely result on Friday as only 77k net new jobs created last month, which could indicate a slowing of the US economy.
- Swiss CPI (inflation) data released yesterday showed a month-on-month increase of 0.6%, one tick higher than the 0.5% which was widely expected.
- US ISM Services PMI data released yesterday came in a bit higher than expected.
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