ECB President Mario Draghi did everything he could today to put a dovish slant on a central bank that’s actively pursuing less monetary stimulus but as we’ve seen before, traders were not interested in what he had to say, it’s what he didn’t say that was important.
The U.S. dollar’s recovery attempt since last week has been futile. Thanks to poor economic data, Fed officials’ dovish comments and fears over the economic impact of the hurricane, not many people are willing to stand in the way of the dollar’s spectacular slump since the turn of the year.
European stock indices stormed higher yesterday and have extended their gains this morning ahead of the European Central Bank rate decision and press conference today. The main focus will be on whether or not the ECB would announce a plan to taper its quantitative easing program, and any comments about the euro, which has climbed to multi-year highs against a number of foreign currencies.
If Federal Reserve policy makers were already starting to question the need for another rate hike this year – and the pace thereafter – then this week’s data won’t have made them feel any more comfortable.
The Jackson Hole Symposium is this week's most anticipated event, in part due to a severe lack of other newsworthy market stories but also because two very important central bankers are scheduled to appear.
After stocks and the dollar surged on Tuesday, following a Politico report that Trump’s team have taken a significant step on tax reforms, the President’s threats on Tuesday night to shut down the government and terminate the NAFTA agreement, were not well received by investors, who responded by dragging both equities and the dollar lower.