Economic Events Outlook, Oct 25 – ECB Ready to Rumble
Arslan Butt • 2 min read
Good morning, traders.
The financial markets trade the risk-off sentiment, moving their investments from the stock markets to safer assets such as GOLD. On Wednesday, the US dollar surged as stocks fell and after European data indicated that economic growth could be weakening across the Eurozone, depressing the Euro.
Today, investor focus remains on the EUR/USD as the ECB (European Central Bank) is due to release the monetary policy and considering the series of red indicators on Wednesday, it will be interesting to see what Mario Draghi has to say about it. Here’s what to expect from Draghi today..
Watchlist – Key Economic Events Today
EUR – European Central Bank Policy Decision
Main Refinancing Rate – At 11:45 (GMT), the European Central Bank will be releasing its refinancing rate (interest rate) which is widely expected to remain unchanged at 0.00%. For your info, an initial rate hike is projected in mid-2019.
So, what can we look forward to at this meeting? It’s Mario Draghi and his press conference.
ECB Press Conference – The ECB is widely expected to stand pat this month, and investors speculate that it may offer hints on its plans to start tapering its bond purchases this year. Any upgrade or downgrade of inflation and GDP forecasts may be indicative of the next moves by the central bank.
Potential Impact: We may see another round of weakness in the single currency Euro if ECB decides to leave the interest rate unchanged at 0.00%. However, after 45 minutes of minimum bid rate, the investors focus will shift to press conference and the market may trade sideways.
EUR – Spanish Unemployment Rate
The National Statistics Institute is due to release the Spanish unemployment rate at 7:00 (GMT). It’s positively forecast to drop from 15.3% to 14.9%.
EUR – German Ifo Business Climate
At 8:00 (GMT), Ifo Institute for Economic Research will be releasing the German Business Climate data. For your info, it’s a survey of about 7K businesses which asks respondents to rate the relative level of current business conditions and expectations for the next six months.
As per economists’ forecast, a slight drop is expected from 103.7 to 103.1 which may not place any impact on single currency Euro. However, a significant change can offer a quick trade opportunity ahead of ECB policy today.
USD – Core Durable Goods Orders m/m
Moving away from the European indicators, the US dollar may get impacted by core durable goods orders. For all the newbies, it’s an economic indicator that measures the change in the total value of new purchase orders placed with manufacturers for durable goods, excluding transportation items. The figure is due at 12:30 (GMT) and the orders are expected to gain by 0.5% which is higher than 0.0% gain in Sep 2018.
The deviation from its forecast and previous figures is actually good from the trading point of view. The more it deviates, the more chances we have to capture the price fluctuations.
That’s it for now. See you again with trade setups and forex trading signals. Good luck!