All Eyes on the ECB: What Can we Expect From Today’s Meeting? [Video]

Markets will focus on today’s ECB meeting at 11:45 GMT and specifically Mario Draghi’s press conference at 12:30 GMT, as they look for clues on future monetary policy. Recent EU data has pointed to a sluggish first quarter for 2019 led by a deepening downturn in manufacturing, where output dropped at the sharpest rate in almost 6 years.

Could the ECB Impose a Negative Rate?

All things considered, ECB’s task to bring inflation back toward their target of 2%, is at the very least a challenging one. One thing we can be sure about is that a rate hike is not expected for this year and there is even a growing possibility of a negative deposit rate.

While no positive change expected from the ECB, any slight positive bias during the Press conference could spark further demand for the EUR. Meanwhile, long term charts in the EUR are supporting further weakening, so clearly the market is looking for guidance from Draghi's team

May to Plea For a Brexit Delay

As EU leaders prepare for an emergency summit in Brussels to decide whether to offer the UK another delay to Brexit, traders are watching closely for direction on GBP pairs. UK Prime Minister Theresa May will seek to postpone the date the UK leaves the EU beyond this Friday, until 30 June. However, the EU is expected to offer a longer delay - something which will give the EU the upper hand in long-term negotiations.

The GBP/USD pair traded flat this morning, after noting some very moderate gains yesterday on a weaker USD. The sterling was last seen trading at $1.3070 as of 7:10 GMT.  Markets are seemingly disappointed and looking to rather sell the Pound.

Safe Havens Back in the Spotlight

Gold prices steadied above the key $1300 level on Wednesday as the dollar firmed slightly. The noble metal remained near a two-week peak hit in the previous session as equities slipped on concerns over global growth and trade tensions between the United States and Europe.

We saw a switch from equities to safe havens today after U.S. President Donald Trump voiced his intention of imposing tariffs on imports from EU and amid broader concerns on global economic slowdown.  Safe haven currencies are also growing in demand. Meanwhile, stock markets are showing signs of bearish reversal and could weaken further.