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$EUINTR -Europe Interest Rates ECONOMICS:EUINTR (October/2024) source: European Central Bank - The ECB lowered its three key interest rates by 25 bps in October 2024, as expected, following similar moves in September and June. The deposit facility, main refinancing operations, and marginal lending facility rates will now be 3.25%, 3.40%, and 3.65%, respectively. This decision stems from an updated assessment of inflation, which shows disinflation progressing well. In September, inflation in the Eurozone fell below the ECB’s target of 2% for the first time in more than three years. While inflation is expected to rise in the short term, it should decline toward the 2% target in 2025. Wage growth remains high, but pressures are easing. The ECB remains committed to restrictive rates to ensure inflation reaches its medium-term goal, using a data-driven, flexible approach without committing to a specific rate path.
ECONOMICS:EUINTR
by Mr_J__fx
EURGBP Bearish Bias Reaffirmed after UK CPI but BoE LoomsThe Bank of England lowered rates last month, for the first time in four years, joining major peers in their shift to less restrictive monetary settings. However, officials adopted a cautious and non-committal approach on further easing, as they remain wary of inflation which they expect to rise further this year. Today’s inflation report will likely strengthen the BoE’s apprehension, as CPI stayed above the 2% target, while core accelerated to 3.6% y/y in August. EURGPB faces pushback as a result, at the critical resistance cluster provided by the EMA200 (black line) and the 23.6% Fibonacci of the August fall. Bearish bias is intact below that level, sustaining risk for further losses towards and beyond 0.8381. The monetary policy differential is unfavorable for the pair, as the ECB has already slashed rates twice this year and at least one more cut is expected this year. The Bank of England will have a hard time moving again on Wednesday, but pressure for faster easing pace is likely to increase. Wage growth moderated substantially and this can allow greater tolerance for slower return of inflation to target, while the economy remains fragile, despite exiting its brief recession. EUR/GBP has contained its fall in recent weeks and a break above the aforementioned resistance cluster would pause the bearish bias and provide the launching pad for taking out the 38.2% Fibonacci. Greater recovery however towards the 61.8% levels looks hard under current policy dynamics. Stratos Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 6 2% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Europe Ltd (trading as “FXCM” or “FXCM EU”) (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 59% of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Stratos Trading Pty. Limited (www.fxcm.com): Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763). Please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com Stratos Global LLC (www.fxcm.com): Losses can exceed deposits. Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this video are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed via FXCM`s website: Stratos Markets Limited clients please see: www.fxcm.com Stratos Europe Ltd clients please see: www.fxcm.com Stratos Trading Pty. Limited clients please see: www.fxcm.com Stratos Global LLC clients please see: www.fxcm.com Past Performance is not an indicator of future results.
Short
by FXCM
EUR/JPY - BUY SET UP ON ECB RATE HIKES The EURO now sits under 138.000 on the exchange rate, a key resistance level that will now surely break after European Inflation hit 8.1% for the month of April 2022, igniting the debate about whether the ECB should be raising rates at 0.50% increments instead of 0.25% increments as signaled by Christian Legard. With European Bond Yields climbing and paying a premium over Japan, the EURO will likely continue to strengthen against the YEN as interest rates rise in Europe. The overnight carry trade will start to become profitable for the EURO into 2023, which is likely to attract investors into buying the currency pair.
Long
by KayansMarkets
EUR/CAD - Long Set Up As ECB Signals Rate Hikes Are ComingThe EURO is likely to strengthen against the Canadian Dollar as the European Central Bank signals interest rates are going up in July and September, to move the overnight cash rate from -0.50% to 0.00%. The reason the EURO will strengthen is down to the fact that interest rate differentials will narrow from the market's previous expectation, so investors who are short EUR/CAD will likely look to cash in on the carry trade as it's now hit its peak unless the Bank of Canada goes further then markets expect with rate hikes. Oil prices are also a bullish beneficiary to the Canadian dollar, but Oil looks to have peaked since it hit $130.00 on March 8th 2022.
Long
by KayansMarkets
It’s Recalibration, Not Tapering (10 September 2021)The ECB’s decision. The European Central Bank (ECB) held its interest rates unchanged during their monetary policy meeting yesterday. Main Refinancing Operations Rate: 0.00% Marginal Lending Facility Rate: 0.25% Deposit Facility Rate: -0.50% The size of its quantitative easing (QE) programmes remains unchanged as well. Asset Purchase Programme (APP): €20 billion per month Pandemic Emergency Purchase Programme (PEPP): €1,850 billion in total On top of that, the central bank has opted for a reduction of pace in its assets purchase under the PEPP but did not provide more details on the amount. At the moment, €80 billion worth of assets are being purchased on a monthly basis. It’s recalibration, not tapering. Just when the market is trying to figure out from the monetary policy statement if the ECB has just carried out a QE tapering, the central bank’s President Christine Lagarde elucidated that the reduction of the pace is not a tapering, but a recalibration. The ECB’s decision “is to calibrate the pace of our purchases in order to deliver on our goal of favourable financing conditions”. President Lagarde’s comment left the market wondering how significant is such an action carried out by the central bank going to have on QE if it is not considered as tapering. As a result, the euro was moving in an unclear direction. Positive inflation projections. Although the ECB’s action is likely going to spark some discussions over its ambiguity, one thing we know for sure is that the central bank is feeling confident in the recent rise in inflation in the eurozone. As released in the quarterly projection materials, overall inflation forecasts have been revised upwards. Inflation Projections: 2021: revised upwards from previous 1.9% to 2.2% 2022: revised upwards from previous 1.5% to 1.7% 2023: revised upwards from previous 1.4% to 1.5%
by GH_Lee