Fundamental analytics

Mario Draghi's press conference in the spotlight, USD dollar is under pressure

On Thursday, the negative dynamics of equity markets remains intact. European equities fell immediately after the bell in early trading; reflecting yesterday's Wall-Street decline after the Federal Reserve outlined a course for further tightening of monetary policy. Meanwhile, investors focused on the meeting of the European Central Bank, which is expected to pay enough attention to the future of european supportive bonds purchases program.

EUR / USD is trading in the positive zone recovering to two-week highs despite the Fed's "hawkish" statements and an interest rate-hike of 25 bpts. New item in yesterday's statement was the decision to change plans for the amount of rate hike for the second half of the year.

As for ECB meeting, investors are not waiting for a change in monetary policy, but markets wait for signals that the incentive program is soon to be limited or ended, and thanks to these expectations, the Euro shows moderate growth, which can only accelerate if the expectations of the markets coincide with the actions of the ECB. If this does not happen, EUR / USD may get under strong pressure as the traders return the market agenda formed yesterday's after FOMC meeting.

Today, in addition to the press conference of Mario Draghi, US will publish data on retail sales, but most likely this statistics will be ignored, as the decision of the ECB has a much more significant for the market.

Oil shows restrained growth after the arrival of positive news from the IEA and the US Energy Ministry yesterday. In its monthly report, the IEA surprised many traders by saying that in 2019 there might be a shortage of supply in the oil market if production volumes in the market remains close to current levels.

Additional support was provide to oil after the publication of data from the US Department of Energy, which recorded a stronger decline in oil reserves in a week.


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