Unchanged Policy Decision from ECB - a leaf out of the Fed's book

EURUSD is rangebound post the ECB Decision holding 1.0900 resistance and 1.0870 support.

Policy Rates Unchanged

Inflation - Aside from an energy-related upward base effect on headline inflation, the declining trend in underlying inflation has continued

Tight financing conditions are dampening demand, and this is helping to push down inflation.

Future decisions will ensure that its policy rates will be set at sufficiently restrictive levels for as long as necessary.

The Governing Council will continue to follow a data-dependent approach to determining the appropriate level and duration of restriction.

PEPP Program = reinvest, in full, the principal payments from maturing securities purchased under the PEPP during the first half of 2024.Over the second half of the year, it intends to reduce the PEPP portfolio by €7.5 billion per month on average. The Governing Council intends to discontinue reinvestments under the PEPP at the end of 2024.

The next 1 hour is likely to be volatile ahead of the ECB press conference and data out of the U.S

Chair Powell - Unequivocally Dovish at Jackson Hole ! Front and Centre Focus on Employment Numbers | USD Index at lower end of the 100.50 - 106.50 Range

I have two basic rules about winning in trading as well as in life: 1. If you don't bet, you can't win. 2. If you lose all your chips, you can't bet. ~ Larry Hite Over the last 3 weeks, after the Aug 5 lows, yields on US2s have consolidated in the 3.90% - 4.10% price range and US10s have progressively made lower lows to close the week at 3.92% and 3.80% respectively. US2s10s bull steepened to close the week at -11.90 bps. USD index closed the week at 100.68, 5% off highs of 106.13 June highs and within close proximity to the established range of 100.50 - 106.50 since last year. There is a 76% probability of a 25 bps rate cut in the Sep Policy. The market is broadly equally divided between a 25 bps and a 50 bps in the November Policy and holds a 87% probability of FFR in the 4.25% - 4.50% range by end of 2024. By next year September Policy, the market assigns a 90% probability of FFR at 3.25% - 3.50%, i.e. 200 bps of cuts in next 1 year. The Atlanta Fed GDP Now ...

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Unchanged Policy Decision from ECB - a leaf out of the Fed's book

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