Mind the Daghster, Again
The ECB (European Central Bank) president, Mario Draghi, is the star of the evening today. There´s no economic data on the calendar today, so Draghi´s appearance at the European parliament is the only forex event which might throw prices around a bit.
It will be funny to watch since this is the second most hated place for Draghi after the German Bundestag. But to forex traders like us, the effect his comments will have on the Euro pairs is much more important than having an afternoon of fun.
He will surely be asked about the ECB monetary policy path. It´s almost 100% certain that the ECB will stay on hold in December, so the attention will be on next year´s policy. There are too many unknowns for the Euro land coming up, so I don´t think his comments will be that straightforward.
The Italian referendum will be held in about a week and it is crucial to the Italian PM Renzi. He´s pro EU so if he´s gone, then Merkel will be short of a strong ally. This weekend´s elections in the French Conservative Party calmed the nerves somewhat as Fillon is on his way to becoming president. Now that the odds of far-right and anti EU leader, Le Penn, getting in charge of France have diminished, there are two things less for Draghi to worry.
Still, Brexit, the EU-US relations, elections in Germany, and the Netherlands, among other surprises, are more than enough to throw any central bank off its course. So I expect Draghi to try and be as confusing as he can in order not to give any clues away. I would concentrate on his comments about inflation and economic growth, if there are any, because this is the most we can get from the master of disguise.
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