Draghi dents the Euro ahead of NFP

<p>The ECB press conference and in particular the Q&A session sent the single currency into free fall yesterday afternoon with the euro cross market taking […]</p>

The ECB press conference and in particular the Q&A session sent the single currency into free fall yesterday afternoon with the euro cross market taking the brunt of the move. The ECB statement downgraded economic forecasts as had been widely expected by the market with the Bundesbank following suit this morning on the German economy forecasting 2013 GDP to 0.4% from 1.6% taking the single currency to fresh weekly lows.

The key to yesterdays move was a question from the media as to how the ECB could add stimulus to the economy if outright QE wasn’t an option and had negative rates on deposits been discusses? The answer was yes although the ECB President refused to elaborate further adding to the Euro woes was a flat refusal on the Spanish request for a commitment to a 200 basis point cap on the spreads between German bund yields and the Spanish bund yield.

Today’s highlight will be the US jobs report at 1.30pm this afternoon where my esteemed colleague from across the pond points out the outlook isn’t great with the recent ISM employment component coming in at 50.3 from 54.9, the JOLTS (job openings) at 3561 from 3653 and this week’s ADP printing 118k from 157k.

Hurricane Sandy looks to subtract between 100-150k from the NFP number today with most looking for a rise of 50k with a slight rise in the unemployment rate to 8% from 7.9%.

 


EUR/USD

Supports 1.2920-1.2880-1.2820 | Resistance 1.2980-1.3010-1.3090


USD/JPY

Supports 82.00-81.60-81.40 | Resistance 82.60-82.85-83.20


GBP/USD

Supports 1.6000-1.5980-1.5960 | Resistance 1.6080-1.6130-1.6175

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.