The European session is a bit dull on the data front as we don’t have market moving releases on the agenda. The Eurozone Retail Sales could be the only notable report but it’s generally a low tier release. Things will get more interesting in the American session as we have the ECB Policy Decision and the US Jobless Claims.
12:15 GMT/08:15 ET – ECB Policy Decision
The ECB is expected to cut interest rates
from 4.00% to 3.75%. This rate cut has been telegraphed very strongly, so the
focus will be on what the central bank intends to do next. The recent data
showed that the economy picked up steam and the labour market remains strong.
This might give the policymakers a reason to err on the cautious side
although the latest Eurozone
PMIs showed that inflationary pressures continue to abate. The
market expects two more rate cuts from the ECB this year but as it’s always the
case, that will depend on the data. So, we will likely get a “cautious cut” as the central bank is likely to stress its data dependency and not pre-commit to anything.
12:30 GMT/08:30 ET – US Jobless Claims
The US Jobless Claims
continue to be one of the most important releases to follow every week as it’s a
timelier indicator on the state of the labour market. Initial Claims keep on hovering around cycle
lows, while Continuing Claims remain firm around the 1800K level.
This has led to a weaker and weaker market reaction as participants become used to these numbers. This week Initial Claims are
expected at 215K vs. 219K prior, while
Continuing Claims are seen at 1790K vs. 1791K prior.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
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