Bullet Report: ECB Rate Decision and Press Conference Today

Today’s main event is the ECB Meeting which is expected to remain on hold just like Australia and Canada did this week. Growth in the EU remains subdued and there is increasing pressure to the ECB to act as low inflation continues despite massive easing programs. The rate decision, will be followed by a press conference with ECB President Mario Draghi. A possible downgrade of economic forecasts is expected to also be communicated, something that could hurt the EUR.

Currencies: Overall the USD still remains the weakest currency this weak as the market continues to pare back expectations on Fed hike with futures pricing a 15% of September hike and 50.7% chance for December. EUR/USD opened in Asia 0.15% lower at 1.1245 after a quiet session overnight. The EUR market is extremely quiet ahead of the ECB announcement later today and the range of last days could remain the same if there are no changes from expectations. GBP/USD is flat at 1.3335, while AUD/USD is trading 0.55% higher at 0.7708 after positive China trade data.

Stocks: The S&P and the Dow fell slightly on Wednesday, after a report from the 12 Federal Reserve districts had a modestly positive tone about the economy but noted that the presidential election is making some firms cautious about expanding activity. But the Nasdaq eked out a gain and closed at a record high as tech stocks rallied, helped in part by Apple. which rose 0.6% after unveiling the iPhone 7 at its flagship product event in San Francisco.

Oil and Gold: Crude prices rebounded in Asia on Thursday as a major draw in U.S. stockpile estimates reported by an industry group lifted sentiment. The data showed a 12-million-barrel decrease in US crude oil supplies for the week of August 28. This appears to be the largest drawdown in crude inventories since the 12.4-million-barrel drop reported in March 2013. Overnight, gold prices were little changed near a three-week high in North American trade on Wednesday, as investors focused on the next set of U.S. data and Fed speakers for further guidance on the timing of the next interest rate hike.

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