ECB delivers ahead of non-farm payrolls

<p>ECB President Mario Draghi didn’t disappoint euro bears at the ECB meeting yesterday, with the announcement of interest rate cuts to record lows and private […]</p>

ECB President Mario Draghi didn’t disappoint euro bears at the ECB meeting yesterday, with the announcement of interest rate cuts to record lows and private sector bond purchases taking the single currency just shy of levels not seen since the middle of 2013. The ECB rate cut of 10 bps was seen across the refinancing, marginal and deposit rates, taking the levels to 0.0%,0.3% and -0.2% respectively. Details of the ABS purchases programme will be announced after the October meeting with the ECB president suggesting the measures will have a ‘sizeable impact’ on the ECB balance sheet. The message from the press conference was that the ECB was ‘completing and strengthening’ what they initiated in June as they look for maximum take up from the targeted LTRO in just over a week. The markets were reminded that the ECB still isn’t finished, with further QE an option in December if there is no further improvement to the inflation picture.

The upcoming Scottish referendum continues to weigh on the pound as the NZD came under fresh pressure in Asia following comments from New Zealand Finance Minister English. He noted that risks from dairy prices had diminished and emphasised ‘NZ faces less inflationary pressure than expected.’

The data highlight today will no doubt be the US jobs report, with expectations pretty much unchanged following the ADP release that showed a marginal miss at 204k versus the 218k expected. The market is looking for a headline number of 220k, with the unemployment rate looking to drop to 6.1% from 6.2%. Although seasonally, August is a weak month for the US jobs report.

 

EUR/USD

Supports 1.2910-1.2880-1.2840 | Resistance 1.3000-1.3050-1.3100

 

USD/JPY

Supports 105.00-104.75-104.50  | Resistance 105.70-106.10-107.00

 



GBP/USD

Supports 1.6300-1.6285-1.6250 | Resistance 1.6365-1.6400-1.6440

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