Markets Await ECB’s Meeting

Markets Await ECB’s Meeting

On Wednesday, European shares rose as a regional banking index hit an 11-month high after Credit Suisse bank announced further cost cutting and Italian banks surged towards their best two-day run since 2012.

Markets are awaiting the ECB’s meeting, which will be held later on today for possible signals on when the ECB will begin preparing bond purchases under its quantitative easing programme. The single currency could be negatively affected by the ECB’s decisions.  Later on today, Mr Draghi will hold a press conference and the most important question is: will banks cut quantitative easing programmes even if inflation rises again?

Euro is trading at $1.0760 vs. USD and could move further during the day.

The Sterling pound settled at $1.26 as Britain's manufacturing in October declined to its worst quarter in four years, affected by a shutdown of the country's largest oil field.

GBP could trade under pressure and decline further to $1.25 by the end of the week.

Gold settled above the support level of $1,170 as the Greenback declined vs. the common currency ahead of a European Central Bank meeting.

Also on Wednesday, oil prices fell amid concerns that the output cuts promised by OPEC and Russia could be deep enough to end a supply overhang that has weighed on markets for more than two years. WTI settled below $50 and could re-test such levels during the day. Technically, closing below $50 by the end of the week could be a negative signal.

The most important economic events:

  • EUR European Central Bank Rate Decision (DEC 8): (GMT: 14:45) – Important – Forecast (0.00%) – Previous (0.00%).
  • EUR ECB Deposit Facility Rate (DEC 8): (GMT: 14:45) – Important – Forecast (-0.40%) – Previous (-0.40%).
  • EUR ECB Marginal Lending Facility (DEC 8): (GMT: 14:45) – Important – Forecast (0.25%) – Previous (0.25%)
  • EUR ECB Asset Purchase Target (DEC): (GMT: 14:45) – Important – Forecast (EU80b) – Previous (EU80b)

The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.

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