The beginning of the session in terms of macroeconomic calendar will run extremely quietly. The accumulation of data appears in the afternoon – its official opening will inaugurate the ECB decision on interest rates at 13:45. Then, up to 17 certainly will not lack emotions that will warm positions of traders in the frosty Thursday.
The December report from Australian labor market
Before we go, however, to current events, it is worth to go back for a moment to the publication of the night – about 12:30 GMT we had December report from the Australian labor market. Readings presented as follows:
- Changing jobs: 13,500, forecast 10,000, previously 37,100 (after a downward revision)
- Unemployment rate: 5.8% vs. forcast and previously 5.7%
Publication on AUD/USD caused a slide of dozens of pips, setting lows of the session – from this moment Aussie bounces up:
Stormy calendar for Wednesday, 19 January
About forecasts regarding the ECB meeting we wrote in an earlier article. Regarding the macroeconomic calendar the largest volume of data will be at 14:30. Just then, besides the conference of Mario Draghi will be published US building permits, housing starts and Canadian data on industrial sales. The session will summarize at 17:00 EIA publishing the change in oil stocks:
In the evening can also speak Donald Trump and Janet Yellen – we do not know yet the exact time of these occurrences.
Draghi will be boring – sell EUR/USD
Analysts Bank of America Merrill Lynch expect that this week Draghi will try at all costs to omit mentioning further changes to monetary policy. The dominant theme in the Old Continent is now an increase in inflation and real economic activity – ultimately, it could allow the ECB to start lowering bond purchase program and end the QE faster. So far it is too early for such scenarios and Draghi during Thursday’s meeting will keep up to set a month ago December deadlines.
BofA says that investors should focus on three main elements:
- How Draghi react to increases in inflation in the last few weeks
- Will the ECB’s descript the details of implementation of the program of QE after recent technical changes
- Any comments about the potential tapering – although these are unlikely
Generally speaking Draghi will be rather dull – the ECB is not in the habit of making changes in the monetary policy meeting after meeting. Any signs of hawkish rhetoric during a press conference, according to BofA could be used to sell EUR/USD.