ECB Set To Hold Key Rate at Record Low
The European Central Bank announces the outcome of its governing council meeting today. The bank is widely expected to keep its monetary policy unchanged.
· At 2.00 am ET, Destatis is slated to release Germany's producer prices for September. Economists forecast the producer price index to drop 1.2 percent annually after easing 1.6 percent in August.
· In the meantime, Switzerland's foreign trade data is due for September. The trade surplus was CHF 3.02 billion in August.
· At 3.30 am ET, Statistics Sweden is scheduled to release unemployment data. The jobless rate is forecast to fall to 6.3 percent in September from 6.6 percent in August.
· At 4.00 am ET, the ECB releases the current account balance for August. The euro area current account surplus totaled EUR 31.5 billion in July.
· At 4.30 am ET, the Office for National Statistics releases U.K. retail sales data for September. Sales are forecast to rise 0.3 percent on month after falling 0.2 percent in August.
· At 7.00 am ET, Turkey's central bank announces its interest rate decision. The bank is widely expected to cut the lending rate to 8.00 percent from 8.25 percent and to keep its borrowing rate unchanged at 7.25 percent.
· At 7.45 am ET, the European Central Bank is set to announce the interest rate decision. The bank is forecast to keep its refi rate at zero percent and the deposit rate at -0.4 percent.
ECB Chief Mario Draghi holds his customary press conference at 8.30 am ET. He is unlikely to unveil new stimulus measures despite weak inflation and feeble growth.
The major data release overnight was the Australian jobs report, where Sep recorded a loss of 9.8k vs expectations of a 15k gain. Some were looking for even better gains here, but in the context of the miss, AUD/USD losses of around half a cent may be extended, especially after trading through .7700 levels yesterday. The retreat will come in line with the CAD pullback off 1.3000 against the USD, where the buying interest at this figure level held the market until comments from BoC’s Poloz that the central bank actively discussed more stimulus hit the wires. This puts 1.3200 back in focus, possibly 1.3300, trading through 1.3150 recently. All focus on the EUR today though as the ECB meeting and press conference will dominate – QE tapering vs a possible extension to the current program are the opposing ‘forces’ which will drive trade in the single until, in the early exchanges, EUR/USD is looking to challenge the bids from 1.0950. USD/CHF and USD/JPY receive a bid accordingly – steady risk sentiment aiding both pairs also. GBP will slip out of the limelight for now, but notable was the heavy selling interest in Cable in the 1.2325-30 area yesterday.
AUD/USD Pulls Back As Data Disappoints
AUD is the weakest currency amid G10 this morning losing around 0.7% vs USD as data from Australian labor market disappointed. Employment in September declined by 9.8k jobs whilst consensus called for an increase of 15k jobs. In the wake of softer numbers AUD/USD pulled back from important resistance at 0.7732 and move lower over the one figures.
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