Today’s Key Market Drivers: 13th September 2018
“Traders are now waiting for the ECB and BOE statements today.”
The market on Wednesday had no high impacting economic news and no major theme this week to drive any significant trends in either direction. We did see some profit taking on long US Dollar positions leading into the ECB and BOE’s policy statements today and this has helped the Aussie and Kiwi Dollars off their lows. Don’t be fooled, there is no significant news that’s driving any of these moves as we head into Thursday and what traders are now waiting for is what the ECB will do with it’s trillion Euro stimulus program and where they see Euro Zone economic growth in coming quarters.
The market has already priced in the expectation that the ECB will wind up its stimulus program in December but what is not priced in is the Central Banks forecast on economic growth over coming quarters. If the ECB delivers a more dovish assessment of the Euro Area’s growth prospects the probability is the Euro will decline in value in the shorter term. The market does not expect anything new from the Bank of England today but just like the ECB the market wants to hear how the BOE views the current Brexit negotiations and how it will impact economic growth in coming quarters. I am certainly looking for any buying opportunity on the Pound as a move back higher after a 6 months slide is not far away.
Today’s economic calendar shows the Aussie Dollar will be busy from 11.00am with inflation expectation data due and at 11.30am the latest unemployment data for August. The market doesn’t expect a change to the official unemployment rate of 5.3%, however, what will likely drive the AUD post the news is the number of jobs created or lost over the period. Looking further ahead into the US trading session and US Inflation data is set for release at 10.30am AEST and this has the potential to shift sentiment back in favour of the buyers of the US Dollar. I suspect the inflation number has a solid probability of beating markets estimates and by this time tomorrow, I expect the US Dollar to be strengthening once again.
It would be nice to be able to continue today’s report with an extended piece on the major theme in the market but frankly, there isn’t one so I am not going to attempt to make something up for the sake of it.
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About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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