In the US, we get the usual Thursday jobless claims, the Markit PMI, and the leading index. But Draghi is the main attraction. He can hardly avoid noting the slumping data that points to the necessity of naming a worsening "balance of risks." Draghi can't avoid sounding somewhat dovish, but at the same time reluctant to draw conclusions until the ECB economics staff comes up with new forecasts in March and the policy board actually talks about alternative paths.

"We did not discuss...." X or Y is a tricky way for Draghi to escape giving a hard answer. He is representing the policy board, not his own opinions. Fair, but an escape hatch that annoys the reporters. Weall know Draghi must come off as worried about conditions and possibly open to the idea of postponement, but we also know we are not getting any hard news today because the board didn't discuss alternative pathways. We are going to get the usual pablum about needing more data.

We should probably consider that all this is already priced in. There is a good chance we get a "sell on the rumor, buy on the news" episode. We know the Fed is on hold but we are not yet certain the ECB is on hold, too. Does Japan show a model? Expectations are forming that more QE might be in store. But Draghi's take last week was "slowdown, not recession." We expect only the slightest whiff of retreat. And Gittler at ACLS has one of his splendid charts showing that financial conditions are not dire.

Strategic Currency Briefing

And see the euro on the weekly chart. A weekly chart is hardly tradeable, but notice we have a long-term recovery off the crash of 2015. Okay, we might get a dip to support at the channel bottom (1.0989), but this is corrective move, not a primary new trend. Wishful thinking?

Strategic Currency Briefing



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