The British EU referendum Aftermath has reduced the impact of the stimulus ECB
the European Central bank (ECB) is expected to keep interest rates and quantitative easing (QE) measures with unchanged focus for investors are the words of President Mario Draghi that meet the response of the central bank Brexit risks he has said could take up to 0.5 percent points of the European economy over the next three years. The European Central Bank (ECB) will publish its reference rate of return on 21 July, at 7:45 EDT, to be followed by the press conference of President Mario Draghi at 08:30.
The leading indicators in Europe Draghi will put in place after the vote Brexit decreased the potential benefits of two monetary policy easing blows his Bazooka. The German ZEW economic sentiment survey brought bad news for both German and prospects for the euro area was pessimistic with a -6.8 and -14.7 respectively. The ZEW survey 275 institutional investors and analysts on German economic prospects for 6 months and their views after the British vote to leave the EU. the European consumer confidence remains low at -7.9 U.K. after the vote to leave an already low level -7.2 for the 19 member countries.
The EUR / USD lost nearly 1 percent in the last 5 days. strong economic data from the United States boosted the dollar as the interest rate divergence gap is expected to extend to more deeply negative rates in Europe and suggests that the Federal Reserve of the United States may increase rates later this year. The ECB is running on conventional monetary policy tools and the market will be looking for Mario Draghi to indicate their next move to boost European growth in the post-Brexit world.
The EUR / USD has lost 0.078 percent in the last 24 hours. The pair is trading at 1.1002 after consumer confidence in Europe remains low. The Euro rallied last week to touch 1.1166 highs to only to give back gains after strong sales data US retail and inflation released Friday. The US has posted slightly stronger economic indicators after the shock after E.Ü. British referendum. US non-farm employment (NFP) was too close of voting results to be full price, but it introduced the strongest pillar of the US recovery back after the miss in May.
added 287,000 jobs, the highest number since October and a shot in the arm for job data. The USD was higher after Brexit shocking result on the flight to safety flows now but the fundamentals are the engine USD rose against the major pairs. The market is now estimating the Fed could raise rates as early as September with a 25 percent chance that rises 54 percent in December. Fed members were on record as saying the economy could "run a little hot" with inflation before a decision to raise rates. Given the uncertainty in the market, it is not a bad decision because there are still significant unknowns before the US election.
One of the first negative effects of collateral damage Brexit was the Italian banking system. Risk aversion triggered by British voters drained confidence Risker assets and hit bad loan portfolios. The Italian government is caught between the strict rules of no bailout from the European Commission and protection of Italian deposits. We are obliged to give the Prime Minister and said he could be subjected to a referendum in October.
Former Bank of Italy Governor and now President of the ECB Mario Draghi has the difficult task of managing market expectations as it works to achieve a consensus among Member States towards more stimulus. British output could begin an exodus if the ECB does not clearly provides that remain within the EU is the best alternative for the remaining members
market events to watch this week :.
Thursday, July 21
4:30 GBP Retail Sales m / m
7:45 EUR Minimum Bid Rate
8:30 EUR Press Conference ECB
8:30 USD Philly Fed Manufacturing Index
Claims 8:30 USD unemployment
Friday, July 22
8:30 CAD core CPI m / m
8:30 CAD Core retail sales m / m
* All times EDT
for a full list of events planned in the foreign exchange market check the economic calendar MarketPulse
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