Forecasts & opinions
The ECB announced a stimulus package, which included a 10 basis point rate cut to -0.5%, and open-ended QE of €20 billion per month starting November 1st. The central bank downgraded its inflation and growth forecast, also introduced a reserve system that would exempt part of bank holdings from negative rates. The EUR/USD plunged to yearly lows, bouncing to a fresh weekly high of 1.1086.
Risk trades are more upbeat on the day as Trump delays tariffs on China by two weeks and China is reportedly considering purchasing US agricultural products as a gesture of goodwill ahead of proposed trade talks in October.
As such, the aussie and kiwi are holding firmer to start the session with the yen lagging on the day as equities and bond yields are higher so far today.
The People's Bank of China (PBoC) set the reference rate for the yuan at 7.0851, compared to Friday's fix of 7.0855.
The U.K. Parliament passed a Brexit delay bill late Wednesday and Prime Minister Boris Johnson called on U.K. lawmakers to back his plan to hold a snap election on Oct. 15.
The House of Commons passed a bill to delay the exit of the U.K. from the European Union 327 to 299.
Crude oil prices drop for second day on trade war. A monetary policy announcement from the Bank of Canada is in the spotlight. A change is not expected, with priced-in expectations implied in OIS rates suggesting markets put the probability of stasis at nearly 90 percent. Nevertheless, traders will keenly dissect the accompanying guidance as global headwinds gather and leading indicators suggest domestic growth is set to slow in the second half of 2019.
UK PM Boris Johnson to pass a law to delay UK's divorce with the European
Union until January 31, 2020.
Opposition party and ruling party rebels were underway consistent efforts to prevent a no-deal Brexit from all possibilities.
The government would call for an election in October if MP's block no-deal.
On the technical side, the GBP/USD pair lost ground and dived into the lower vicinity of the Bollinger Bands.
The impact of the Istanbul mayor elections at the end of March, when President Recep Tayyip Erdogan's party lost to the CHP party, are now beginning to show as Erdogan and his party refuse to accept defeat. This lack of acceptance, according to Bloomberg, has put a dent in consumer and business confidence.
The Konjunkturforschungsstelle Swiss Institute for Business Cycle Research released the KOF Leading Indicator for August this morning. The indicator -or barometer as it is often referred to - which captures the movement of GDP growth and the economic trend in Switzerland, showed the same reading as July.
After the Queen approved the Prime Minister's plan to suspend parliament yesterday, legal battles over this plan have begun to stack up, "with the first case filed by Brexit opponents to be heard in an Edinburgh courtroom," Bloomberg said.
As investors keep a keen eye out on trade war developments between the U.S and China, stocks, oil prices, and currency are just three markets that are being affected.
|remaining time till the new event being published|
- ECB could introduce new policy tools if needed - ECB's Vasle
- German economy ministry says does not expect bigger economic downturn
- Current ECB policy not there for decades - ECB's Holzmann
- Eurozone trade surplus unexpectedly widened in July