Summary:
- Euro pares initial gains after ECB drop easing bias from statement
- Draghi walks back on perceived hawkish shift and stocks surge higher
- US500 hits monthly high ahead of expected announcement on tariffs
- Moody’s downgrades Turkey on geopolitical risks
- Could Ripple become the new Bitcoin
- Gold technical overview ahead of NFP
The Draghi press conference following the most recent ECB rate decision, where all rates were unanimously kept on hold has seen a paring of the initial moves with the Euro falling back a little. The Italian was keen to stress that the dropping of the line in the monetary statement that referred to an easing bias wasn’t a major change in policy.
The DE30 made a fairly strong move higher following Draghi and in doing so the market has broken above potentially important resistance. The region around 12280 has previously been defended by the sellers but in breaking above here the market could be set for a move to the upside.
The much discussed trade tariffs form the US are expected to be formalised later on this evening with President Trump scheduled to make an announcement at 3:30 PM ET. The decision itself appears to have been already taken with a unconfirmed reports suggesting that it will be a 25% levy on Steel imports and 10% on Aluminium. It seems like the US500 isn’t too fussed about this with the benchmark today moving up to its highest level of the month.
The Turkish lira found itself under some downward pressure while the country’s debt fell on Wednesday after Moody’s decided to lower the rating by a notch to Ba2 from Ba1. As a result, Turkey has already its rating set two levels below an investment grade, with a stable outlook though (lifted from negative). Among prime reasons cited by Moody’s were geopolitical risks along with external shocks, the major drivers weighing on the currency at a time when a majority of emerging market currencies are performing well on the back of the buoyant global economic backdrop.
Major cryptocurrencies took a hit yesterday extending their decline begun the day before. As far as crypto revelations are concerned there was a particularly significant report from the US Securities and Exchange Commission. Could Ripple overtake Bitcoin as the market leader in crypto? Craig Cole from CryptoMaps, sees a chance for Ripple if we see faster transaction speeds along with lower fees – the two features which could make it easier to financial market to embrace the virtual currency.
Tomorrow sees the latest NFP report at 1:30 in what is sure to be keenly viewed event for Traders. Gold has typically been one of the most sensitive markets to this release and a technical overview of the precious metal ahead of the event can be found here.