fx

Thin calendar to end week – Westpac

Analysts at Westpac noted that the calendar is thin across Australia, Asia, Europe and the US.

Key Quotes:

"Canada Feb unemployment is expected to remain steady at 7.2%. On Sat we see China’s Feb industrial production, retail sales and fixed asset investment data for the first time this year, combining Jan and Feb. Market median for industrial production is 5.6%, the first sub-6% print since Apr 2009."

Analysts at Westpac noted that the calendar is thin across Australia, Asia, Europe and the US.

(Market News Provided by FXstreet) [...]

Schedule for today, Friday, Mar 11’2016:

(time / country / index / period / previous value / forecast) 07:00 Germany CPI, m/m (Finally) February -0.8% 0.4% 07:00 Germany CPI, y/y (Finally) February 0.5% 0% 09:30 United Kingdom Total Trade Balance January -2.71 -2.9 13:30 Canada Empl... [...]

EUR/USD rallies on ECB interest rate limitation – ANZ

Analysts at ANZ explained that the ECB cut the deposit rate by 10bps, increased monthly asset purchases and reduced the refi and marginal lending rates by 5bps.

Key Quotes:


"Having delivered on the day, things changed quickly during the Q&A session, when Draghi delivered a massive counter punch. In response to a question during the press conference, Draghi said that the ECB does not expect to have to cut rates further, as unless the facts change, the ECB thinks it has done enough. But he then said that deeper cuts in the deposit rate could hurt the banking sector.

He indicated that the emphasis of additional easing would come via unconventional policy tools and that interest rates would stay at exceptionally low levels well past the ending of QE.

The market interpreted all that as meaning the ECB has reached the limits of its interest rate cutting cycle. Euro area monetary conditions tightened as a result and EUR/USD rose sharply."

Analysts at ANZ explained that the ECB cut the deposit rate by 10bps, increased monthly asset purchases and reduced the refi and marginal lending rates by 5bps.

(Market News Provided by FXstreet) [...]

ECB made bigger changes than expected – Westpac

Richard Franulovich, analyst at Westpac explained that today’s multi-pronged ECB policy announcement – a 10bp cut in the deposit rate, a EUR20bn increase in the monthly pace of purchases and the announcement of four new targeted longer term refinancing operations - was initially greeted as a strong positive for risk assets.

Key Quotes:

"The overall package is indeed materially larger than many assumed. Credit markets should be especially well supported going forward with the ECB expanding the pool of eligible assets to include investment grade non-bank corporate bonds. And, with the ECB paying banks to borrow at the four new TLTROs - at least those with net lending exceeding a certain benchmark - the ECB has deftly neutralised bank profitability issues inflicted by negative deposit rates.

10yr bund yields initially fell 7bp, financial stocks rose 4-6% and credit markets rallied. EUR/USD initially fell 150pts. The positive early reception would have also been enhanced by a strengthened “announcement effect” whereby today’s stimulus measures were all announced at once. (Until today the ECB’s standard practice had been to announce changes to the QE program during President Draghi’s press conference, 45 minutes after the rate announcement)."

Richard Franulovich, analyst at Westpac explained that today’s multi-pronged ECB policy announcement – a 10bp cut in the deposit rate, a EUR20bn increase in the monthly pace of purchases and the announcement of four new targeted longer term refinancing operations - was initially greeted as a strong positive for risk assets.

(Market News Provided by FXstreet) [...]