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Will ECB Meeting provide market confidence?

Will ECB Meeting provide market confidence?

An underlying tone of investor caution continues to result in muted activity on the financial markets, yesterday being no exception. The main pairs remained within the fairly narrow ranges that we have seen of late, although sterling was under some pressure. Another quiet data day is likely to have contributed to the muted action, with US durable goods for September (beating expectations, but still down 0.4% in the month) being the only release of note – the data did not impact the dollar.

EUR/GBP opened this morning back around the midpoint of the 84- 85p, GBP/USD is just below the halfway mark of $1.37-1.38 and EUR/USD starts at the $1.16 mark. As we look ahead today, the ECB meeting for October will be the main focus, but the consensus is that policy will be left unchanged and so the impact on the euro may be limited. President Lagarde will likely face questions regarding the bank’s inflation policy and rate hike expectations. 

EC sentiment indices and German inflation for October are also due today, as well as the flash reading of Q3 GDP for the US – which is forecast to show growth slowed to 2.7% from 6.7% in Q2. However, without any major surprises the releases are not expected to have any drastic impact on FX markets.


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