The stage is set for an ECB rate hike of 25bps on Thursday at 1315UK time, with both short-term interest rate markets and economists anticipating it. Christine Lagarde's clear signals have solidified expectations for a July rate hike. Yet, the lingering uncertainty remains: What will the ECB reveal about its plans for September?
There have been conflicting signals before the meeting. ECB's Knott indicated a July hike is a "necessity" but future hikes are uncertain. ECB’s Nagel called inflation a ‘greedy beast’ and it would be a mistake to cut interest rates too soon and ECB’s Simkus wouldn’t be surprised if the ECB continues to hike in September. In contrast, ECB’s Stournaras said that another 25 bps hike ‘would be enough’. Furthermore, there has been a flurry of weak PMI prints this week, raising concerns for the ECB that they will need to slow the path of hikes down.
Over the last 23 years whenever the ECB has hiked interest rates, the EURUSD has fallen over 70% of the time for an average drop of -0.83% over the period outlined. Are there more falls ahead with this hike?
Major Trade Risks: The biggest risk here is to do with the market reaction to the Fed meeting the night before and the ECB decision itself.
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.
