ECB President Draghi In Focus

Economic Events Outlook, July 9: ECB President in the Limelight

Posted Monday, July 9, 2018 by
Arslan Butt • 2 min read

Morning traders.

The U.S. dollar collapsed against a basket of global currencies, urged by the trade war and worse than expected labor market figures. The U.S. Labor Department announced that the economy produced more jobs than expected in June, but the average hourly earnings rose less than forecast (0.2% vs. 0.3% previous) and the unemployment rate increased to 4% from multi-year low of 3.8%.

Consequently, sentiments of a fourth rate hike later this year sank. But the September rate hike is still a plausible event. Then why is the dollar getting hit so hard? Actually, the investors have already priced in the two additional rate hikes, one in September and another one in December. But the labor market figures and trade war is making a December call a bit hard, which is why investors seem to take profit in the Greenback.

Economic Events Watchlist

CHF – Unemployment Rate

As you know the unemployment rate shows a percentage of the total workforce that is unemployed and actively seeking employment during the previous month. I will be monitoring the Swiss unemployment rate at 5:45 (GMT). By the way, their rate is expected to fall from 2.6% to 2.5%, which is considered good for currency.  

EUR – German Trade Balance

Since the trade war tensions have begun, the investors seem to focus heavily on this data. Germany is one of the major business hubs of the Eurozone and plays an important role in exports. That’s why the German trade balance will remain in focus at 6:00 (GMT). German trade balance is forecast to rise to 20.3B from 19.4B in June.

GBP – MPC Member Broadbent Speaks

The Bank of England Deputy Governor, Ben Broadbent, is due to deliver opening remarks at the Economics and Psychology conference hosted by the BOE, in London at 7:50 (GMT).

Why should we care about him?

Being a BOE MPC (Monetary Policy Committee) member, Ben’s votes on where to set the nation’s key interest rates and his public engagements are often used to drop subtle clues regarding future monetary policy.  

EUR – ECB President Draghi Speaks

Mario Draghi is in the limelight today and is supposed to appear twice in Brussels. At 13:00 (GMT), Draghi is scheduled to testify about the economy, monetary policy, and virtual currencies before the European Parliament Economic and Monetary Affairs Committee.

In addition, at 15:00 (GMT), he is expected to testify on the European Systemic Risk Board before the European Parliament Economic and Monetary Affairs Committee.

As head of ECB (European Central Bank), he is responsible for controlling the money supply and issuing the monetary policy. So, any forward guidance on the ECB minimum bid rate and tapering will help us form the trade sentiments.

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