Roaring Euro Turns to ECB Rate Decision

The European Central Bank will announce its next policy decision at 13:15 GMT on Thursday. A rate increase of 50bps is already fully priced in, so the euro’s reaction will depend mostly on President Lagarde’s commentary. The economic outlook has improved lately and inflation remains elevated, so a hawkish message that lifts the euro a […]

A Huge Few Days Aahead

We’re seeing plenty of caution in the markets this week which is perhaps not entirely surprising given what lies ahead. Earnings season isn’t going as well as hoped and there are some big names coming up this week that could potentially dampen the mood further. It was always going to be a challenging period given […]

Euro Area Inflation Data as an Appetizer Ahead of FOMC Tonight

Market movers today The main event today will be the FOMC meeting. Anything but a 25bp hike would be a major surprise, and the focus will be on guidance about the terminal rate level. We expect the communication to be on the hawkish side, markets price in cumulative 58bp worth of hikes by next June […]

Will Easing Inflation and Slower Wages Get the Fed Closer to Pause?

Weak economic data ran to the rescue of the equity bulls on Tuesday. The Federal Reserve (Fed) President Jerome Powell will be thrown to the spotlight today, to potentially shoot a couple of doves down to the ground. But there is always a hope that the falling price and wages inflation will get the Fed […]

Fed Expected to Downshift Tightening Pace Again

Markets The build-up to a Fed decision usually brings lackluster trading. This time around, things might be different. For starters because of the January EMU CPI release. Spanish and Belgian data on Monday triggered a market reaction as headline inflation didn’t or didn’t fell as fast as expected while core readings keep setting all-time highs. […]

Euro Higher after Eurozone Inflation Falls

It has been a quiet week for EUR/USD which continues to say close to the 1.09 line. The lack of activity could change in a hurry in the North American session, with the Fed rate announcement. Eurozone inflation slides in January Eurozone inflation is expected to be 8.5% in January, down from 9.2% in December […]

Sunset Market Commentary

Markets January inflation figures from European sovereigns published earlier this week culminated in the European-wide reading today. Bear in mind that Germany’s official CPI print for technical reasons isn’t due until next week. Eurostat instead resorted to an estimate. Price growth eased more than expected, from 9.2% to 8.5%, thanks to falling energy prices. Core […]

UK Will Not Avoid Recession Says IMF; What Does this Mean for the Pound?

Britain’s economy may be the only one that contracts in 2023 according to the IMF’s latest quarterly assessment, dealing a blow to hopes that a recession can be avoided. The pound was the second worst performing currency after the yen last year amid an energy crisis, political chaos and a botched budget, which all added […]

How Important Will Friday's NFP Report Be for the Dollar?

The first US nonfarm payrolls report for 2023 will be published on Friday at 13:30 GMT, a couple of days after the Federal Reserve announces its rate decision. The event may not cause much volatility for the dollar if today’s policy update adjusts rate expectations beforehand, though it will still be critical in how it […]

ISM Shows U.S. Manufacturing Sector Contracted for a Third Month in a Row

The January ISM manufacturing index registered 47.4, slightly below expectations calling for a 48.0 print. The index fell 1.0 percentage point (pp) from December’s reading of 48.4. New orders fell 2.6 pp to 42.5, while new export orders slowed their decline, rising to 49.4. The backlog of orders sub-index rose to 43.4, up 2.0 pp […]