Daily Brief, Dec 12: Economic Events Outlook – Eyes on ECB and UK Elections

Posted Thursday, December 12, 2019 by
Arslan Butt • 2 min read

Good morning, Fellas.
A day before, the Federal Reserve held its interest rates steady and said that it would maintain its standards through 2020.
This year the Federal Reserve cut its rates three times, and in its open market committee for December, it kept its rates at the current range between 1.50% and 1.75%.
According to the Fed statement, the current stance of monetary policy was appropriate to support the sustained expansion of economic activity, a strong labor market, and inflation near the target of 2%.
The Federal Reserve said that it would continue to watch the data to see if global developments and the muted inflationary pressure affect the US economy. The Fed statement of December meeting had no comments like it had in October’s meeting statement in which it was mentioned that uncertainties about outlook remained. But the December statement had no such information may be because of the raised optimism about the fading away of downside risks like the US-China trade war.

Watchlist – Key Economic Events Today

Today, the economic calendar is fully loaded with high impact events from the Eurozone and UK. The European Central Bank will remain in focus for the release of ECB rate decision while the main highlight of the day remains the British Parliamentary election.
GBP – Parliamentary Elections – All Day
Today, voters will elect 650 members to the United Kingdom’s Lower House of Parliament, from which a government will be formed.The winners will likely be projected before the official vote count is announced, based on early vote counts and exit polling. Today, the voters go to polls in an election that will cover the plan for Brexit under Prime Minister Boris Johnson or move Britain via another referendum that could eventually change the decision to transmit the European Union.

So far, almost all major impression polls recommend Johnson will succeed, though pollsters have a 2016 referendum bias, and their designs predict results varying from a suspended parliament to the biggest Conservative slide since the time of Margaret Thatcher.

GBP/USD is currently pricing in a Johnson win, but in case he loses, we may see a dramatic sell-off in it. Besides, his winning may also not drive sharp rises as it has already been priced in.

EUR – ECB Monetary Policy Meeting Accounts – 13:30 GMT

The European Central Bank is the main highlight of the day as it’s due to release the policy minutes from its previous press conference.
Christine Lagarde presides over her first rate decision amid a budding controversy about the bank’s relaxed monetary policy while Lagarde is a squab that supported Quantitative Easing and low-interest rates.
She has discovered a confident tone in her first public presentations. The French politician strives to bring solidarity to the bank and is unlikely to make any drastic choices. Nonetheless, and despite her extensive political background, the former Managing Director of the International Monetary Fund may shift unwanted remarks in her initial press conference, exciting markets. It’s worth monitoring the ECB press conference today.
Good luck for today, and stay tuned for more updates!

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