16 Jul 2015
How to trade ECB: Potential EUR/USD reaction - TDS
FXStreet (Bali) - According to TDS FX and Research Team, today's ECB base case, assigning a 100% probability, is that all rates will be left unchanged, while expecting with a 65% chance that no new measures will be announced.
Trade ECB meeting with Bednarik, Elam and Pinkert; Greece + Germany + Forex
Key Quotes
"Base case: 65%: No new measures. Continues to reiterate the full implementation of the APP and that it has contributed to broad-based easing in financial conditions, but likely adds some reference to Greek contagion risks, either adding a reference to 'unwanted tightening of monetary policy' into the opening paragraph or into the potential downside risks being monitored for the outlook for price developments. Base case should be mildly bearish for EURUSD and we look for a test of 1.0910."
"Upside risks: 15%: GDP growth assessment upgraded from "modest" with no references added elsewhere to suggest a broader focus on stemming downside risks. EURUSD moves higher but capped around 1.0980 as market waits for clarity at Q&A."
"Downside risks: 10%: Suggests lower threshold to increase/frontload QE further. 10%: Uses lower oil prices and unwanted tightening to justify frontloading APP at this meeting. EURUSD pulled lower to 1.0720 on emphasis that additional stimulus necessary sooner rather than later."
Trade ECB meeting with Bednarik, Elam and Pinkert; Greece + Germany + Forex
Key Quotes
"Base case: 65%: No new measures. Continues to reiterate the full implementation of the APP and that it has contributed to broad-based easing in financial conditions, but likely adds some reference to Greek contagion risks, either adding a reference to 'unwanted tightening of monetary policy' into the opening paragraph or into the potential downside risks being monitored for the outlook for price developments. Base case should be mildly bearish for EURUSD and we look for a test of 1.0910."
"Upside risks: 15%: GDP growth assessment upgraded from "modest" with no references added elsewhere to suggest a broader focus on stemming downside risks. EURUSD moves higher but capped around 1.0980 as market waits for clarity at Q&A."
"Downside risks: 10%: Suggests lower threshold to increase/frontload QE further. 10%: Uses lower oil prices and unwanted tightening to justify frontloading APP at this meeting. EURUSD pulled lower to 1.0720 on emphasis that additional stimulus necessary sooner rather than later."