What will Draghi Do? [Video]

Global bourses edged higher after U.S. President Donald Trump announced a two-week extension of tariffs on 250 billion dollars worth of Chinese goods that were set to kick in on October 1st. Talks of Trump being open to meet with Iran's Rouhani also added to the more optimistic sentiment that continues to be present in the markets.

 

All Eyes on the ECB

Investors will now be focusing on a much-anticipated announcement of easing measures from the European Central Bank (ECB). This will be the second to last Draghi meeting today and markets are expecting the central bank to announce an interest rate cut for the first time since 2016 and restart an asset purchasing program. But analysts have warned against setting expectations too high.

It is important to note that there is growing opposition in the northern European countries against the ECB monetary policy which is hurting pensions and savers massively. The whole situation has recently led the Dutch parliament to pass a motion to oppose tiered rates and send a letter to Draghi.

 

EU Shares Touch 6-Week High

European bourses started the day at their highest level since July 30 on fresh evidence of easing trade war tensions between the United States and China. The session will be determined by the extent of the stimulus that the ECB delivers after a policy meeting later on Thursday.

 

Forex Preview: All Eyes on the EUR/USD

Markets will largely focus on the EUR/USD with maestro Draghi to decide its fate later this afternoon, chances are the opposition within the EU and the economy not yet at emergency bad levels could lead to a less dovish ECB than expected which would also help the EUR push higher. Meanwhile, the USD remains strong and today’s CPI data out of the U.S. could provide further direction.  

 

Oil Prices Fail to Recover

Oil prices failed to recover some of the heavy losses recorded in the previous session, despite being briefly buoyed by moves to ease trade tensions between Washington and Beijing and a drop in U.S. crude inventories to the lowest in nearly a year. The reduced prospect of a U.S./Iran war is seen keeping oil prices subdued with President Trump stating that he is willing to ease economic sanctions on Iran before starting a fresh round of nuclear negotiations with Tehran.

 

Gold Dips, BTC steady

Elsewhere, gold prices still remained around $1,500 despite risk appetite rose over the possibility of a resolution on the US/China front, while safe-haven currencies such as the JPY edged lower more noticeably. Elsewhere, BTC remained glued over the 10k level and is currently very hard to determine what it might do next.