Heading into the ECB rate meeting on Thursday this week a Reuters poll from last week shows 39 out of 69 economists surveyed are expecting the European Central Bank to keep rates unchanged at 3.75%.
However, 30 economists expect the ECB to increase rates by 25 basis points. Recent commentary from ECB’s central bankers has also been mixed. ECB’s Knot said last week that markets may underestimate a September hike, and ECB’s Kazmir says one more, likely last, interest rate hike is still needed. In contrast, ECB is VSCO believes the ECB is close to the level of rates at which you can stop increasing.
So, the expectations are fairly evenly balanced with short-term interest rate markets favoring the chances of the ECB being on hold. However, the seasonal bias for the EURGBP is titled to the upside. Over the last 15 years, between September 15 and October 09, the EURGBP has gained 60% of the time with an average return of 1.10%. So, if we see a more hawkish decision, with the ECB hiking rates, will we see the EURGBP gain into the start of early October?
Major Trade Risks: The major trade risk here is that the UK side of the trade could be volatile depending on the Bank of England’s rate path. Furthermore, the ECB may indicate a more dovish outlook by holding rates and signaling the end of the ECB’s hiking cycle.
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular ...
Disclaimer: Past results and past seasonal patterns are no indication of future performance, in particular, future market trends. seasonax GmbH neither recommends nor approves of any particular financial instrument, group of securities, segment of industry, analysis interval or any particular idea, approach, strategy or attitude nor provides consulting nor brokerage nor asset management services. seasonax GmbH hereby excludes any explicit or implied trading recommendation, in particular, any promise, implication or guarantee that profits are earned and losses excluded, provided, however, that in case of doubt, these terms shall be interpreted in abroad sense. Any information provided by seasonax GmbH or on this website or any other kind of data media shall not be construed as any kind of guarantee, warranty or representation, in particular as set forth in a prospectus. Any user is solely responsible for the results or the trading strategy that is created, developed or applied. Indicators, trading strategies and functions provided by seasonax GmbH or on this website or any other kind of data media may contain logical or other errors leading to unexpected results, faulty trading signals and/or substantial losses. seasonax GmbH neither warrants nor guarantees the accuracy, completeness, quality, adequacy or content of the information provided by it or on this website or any other kind of data media. Any user is obligated to comply with any applicable capital market rules of the applicable jurisdiction. All published content and images on this website or any other kind of data media are protected by copyright. Any duplication, processing, distribution or any form of utilisation beyond the scope of copyright law shall require the prior written consent of the author or authors in question. Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or lifestyle. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
