​#worldnews #ECB #Fed ⠀ ECB pre-market: but the dynamics are | xChief | Global

​#worldnews #ECB #Fed
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ECB pre-market: but the dynamics are still vague
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Markets are confident that the ECB will cut rates again tomorrow. This allows European assets to remain positive even when politics and force majeure storm the market, and all global assets are colored in red. The unfavorable economic statistics of recent months have been the perfect backdrop for a monetary policy correction.
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Nevertheless, Lagarde says that lowering rates is necessary not because of economic problems but to give the regulator more room for maneuver. Investors have always liked this view of the future and now trust the ECB more than the Fed.
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Just six months ago, analysts were trying to convince the market that the ECB would cut rates by 60-70 bps by the end of the year. This means that after tomorrow's correction, another one, and maybe two, may appear on the horizon. In any case, the pace of further cuts is still unclear, so short-term speculation cannot be avoided. Expectations of further easing in the US compared to Europe contribute to the weakening of the carry trade in EUR/USD, likely to support the Euro for at least a month.
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The impact of tomorrow's meeting on current euro quotes will be limited, as the decision has already been factored into the price. It is unlikely that Lagarde will say something new at the press conference. We pay special attention to the updated economic forecasts, particularly the dynamics of inflation.
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If the ECB head does not hint at a rate cut in October, the markets will save their strength until the December meeting, until more data is available. The pressure of US statistics and Fed policy on EUR/USD dynamics can also be assessed only in the medium term.
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In any case, speculative trades are not recommended tomorrow – we need to give the Euro a chance to decide on its direction.
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Profits to y’all!