Tomorrow the European Central Bank (ECB) will hold its monthly meeting where they will decide about the future of the monetary policy, including interest rates. Many analysts are expecting two rate cuts this year from the ECB, by -0.10% each, and tomorrow might be the day for the first rate cut.

It will likely be on the deposit rate which is negative already, standing at -0.40%, rather than the refinancing rate which stands at 0.0%. Mario Draghi and other ECB members have also mentioned restarting QE (quantitative easing), so that is another risk factor for the Euro tomorrow.

But before that, we have one last round of important data from the Eurozone – the manufacturing and services reports which will be released this morning. Services are not so important right now because manufacturing is in deep contraction in Germany and the Eurozone.

If manufacturing PMI doesn’t change much today as is expected, then we will likely hear some dovish remarks from the ECB tomorrow. Although, we should watch these reports for any signs which might affect the ECB rhetoric tomorrow.