ECB Bulletin maintains broad-based growth in the region

Published date: 08/11/2018

This morning's ECB Bulletin continues to argue the case that the Eurozone region is still in expansionary territory.  Naturally, it was hard to ignore some of the recent data reads - notably the PMIs - which have been hurt by the trade wars initiated by the US.  The bulletin, therefore, qualifies downside risk to global growth as a result of this.  

More recently, some of the German data has been a little less dovish than the PMIs have been suggesting, with factory orders and production higher than expected this week, though the trade balance was lower than expected (released this morning) but still positive.   

For the EUR, it looks as though the USD will continue to dictate the lead pairing, having held the 1.1300 level on the downside last week and now looking to test the 1.1500 level higher up - we stalled just ahead of this in yesterday's trade.  

Plenty of expiries to note in the 1.1400-1.1500 area over today and tomorrow, so there is every reason to expect range-bound trade in this area, and we did note a push on the downside very early on in Europe which was met with very strong buying.  

The key risk today is the FOMC meeting, and despite many expecting the Fed to stick to the script and maintain their intentions of hiking in Dec, traders will be focusing on the statement to see if there is any watering down of their rate path beyond this year.  More on this later.


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