Focus on the ECB Meeting and U.S. Economic Indicator Releases, with Events Concentrated Early in the NY Market
Today, important economic events, including the monetary policy announcement from the ECB and U.S. retail sales and industrial production, are concentrated early in the NY market. Ahead of the releases, nervous price movements are expected due to short position adjustments and pre-event speculation.
Focus of the ECB Meeting: Trends in Policy Interest Rates and Future Rate Cut Pace
The main focus this time will be on the policy interest rate announcement, the statement, and President Lagarde’s press conference. The central bank deposit rate is highly likely to be lowered by 25 basis points from the current 3.50% to 3.25%. In the previous meeting, President Lagarde suggested that there was little data available for October and that December would be a more appropriate time for judgment. However, following the weak PMI figures and downward revisions of the German GDP growth outlook, a rate cut in October is now priced into the market.
During President Lagarde’s press conference, the nuances regarding the pace of future rate cuts will also be closely watched. The focus will likely be on whether the possibility of consecutive rate cuts will be indicated.
Key Points of U.S. Economic Indicator Releases
With the ongoing strength of the dollar, a series of U.S. economic indicators is expected to impact the dollar exchange rate. At 21:30 Japan time, U.S. retail sales (September), the Philadelphia Fed Business Outlook Survey (October), and initial jobless claims will be released, followed by the industrial production index, business inventories, the housing market index, and foreign securities investment in the U.S. Notably, retail sales are expected to increase by 0.3% month-on-month, while industrial production is projected to decrease by 0.2%. It will be important to assess whether the dollar’s strength continues based on these indicators.
Today’s Key Points and Events
The euro is being sold off in anticipation of a rate cut against the U.S. dollar, and I expect profit-taking buying to emerge from here, so I am maintaining a buy position on the EUR. However, I am also considering a reassessment of my positions depending on the results.
