ECB to change its forward guidance to align with the strategy review
Tuesday’s rebound stuck in trading yesterday as the market sought calmer tones, with 10-year Treasury yields rebounding back to 1.28% and is staying thereabouts now.
There is still plenty of debate on the inflation topic, COVID-19 fears, and whether or not this is just a case of Occam’s razor i.e. yields are trending lower in the long-term. But there are no straightforward answers just yet going into the FOMC meeting next week.
Oil also saw a solid rebound yesterday, bouncing off key technical support levels this week to move to $70 before a bit of a pullback today – down 0.4% to $70.03.
The yen is mildly higher while the loonie and kiwi are a touch softer, though nothing that stands out all too much as we look towards European trading.
1000 GMT – UK July CBI trends total orders, selling prices
1145 GMT – ECB announces its July monetary policy decision
1230 GMT – ECB president Lagarde press conference
The market will scan for clues from Lagarde about PEPP purchases ahead of the supposed September decision where the ECB might announce changes to the programme. Besides that, her tone will also be one to take note of in case it skews towards any added optimism or pessimism on the euro area outlook and inflation in general.
That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.