The ECB rate decision headlines the economic calendar in European trading hours. A change in policy is almost certainly not in the cards. Indeed, markets are not pricing in a change through 2019. That puts the spotlight on the follow-on press conference with central bank President Mario Draghi.
Eurozone economic data has increasingly deteriorated relative to forecasts since August of last year. If Mr. Draghi hints that the Governing Council has mulled counter-measures – another round of TLTRO liquidity injections, perhaps – the Euro is likely to be pressured lower.
A worried tone may also reinforce broader concerns about slowing economic growth worldwide, a subject already generating a flurry of anxious commentary at the World Economic Forum, a gathering of policymakers and financial market bigwigs still underway in Davos, Switzerland.
US PMI survey data might spook investors further. It is expected to show that manufacturing- and service-sector growth has this month. US economic news-flow has tended to underperform analysts’ projections recently, opening the door for disappointment.
Taken together, these developments might trigger another round of de-risking across the broad financial markets. Such a scenario probably bodes well for the perennially anti-risk Japanese Yen. A pickup in liquidity demand amid liquidation may burnish the attraction of the US Dollar also.
ASIA PACIFIC TRADING SESSION
EUROPEAN TRADING SESSION
** All times listed in GMT. See the full economic calendar here.
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