Markets trade within range ahead of ECB and BoE announcements today

<p>AUD was the only mover in Asia ahead of the BoE and ECB meetings today as the lifestyle currency continues higher following the easing bias […]</p>

AUD was the only mover in Asia ahead of the BoE and ECB meetings today as the lifestyle currency continues higher following the easing bias removal from the RBA on Tuesday.

The latest catalyst came from the domestic economy that saw retail sales in line for December as business confidence in Q4 rose three points.

The current account switched from a deficit of AUD 200 million to a surplus of AUD 468 million, allowing AUD to break the 55-day moving average at 0.8940 with ease.

The market will be focusing on the BoE and ECB meetings today – particularly the latter.

The MPC are likely to remain on hold today as any change in forward guidance is likely to be announced at next week’s quarterly inflation report.

The ECB has the market far more divided, with the majority expecting no change today. Most are pointing to the March meeting for some sort of easing. This follows the EU PMI data that ECB President Draghi put as ‘modest growth’ so maybe there is less urgency for action to cut rates today, especially since there was very slight improvement in the unemployment data.

On the other hand, however, January’s inflation report came in weaker at 0.7%, which is where inflation was when the ECB last cut rates in November. Any bolder action in the form of a negative deposit rate announcement would be the most powerful statement of intent from the ECB.

The US data calendar takes the form of the US trade deficit and the weekly initial claims data.



Supports 1.3475-1.3460-1.3400 | Resistance 1.3550-1.3575-1.3635



Supports 100.60-99.80-98.50 | Resistance 101.40-101.75-102.90



Supports 1.6245-1.6210-1.6180 | Resistance 1.6350-1.6410-1.6460


Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.