The SNB and ECB are on the agenda today
Where's the fiscal stimulus, mate?
Good day, everyone! Hope you're all doing well as we look to get things going in the session ahead. It's a big day in Europe as we will have the UK general election but among other things, there's also the SNB and ECB meeting later today.
The pound is keeping higher to start the session amid hopes of a Conservative majority but the race may be closer than you think, which creates a bit of a lopsided risk in the event sentiment starts wavering towards a hung parliament result instead.
Other than that, the dollar is weaker after Fed chair Powell paid more emphasis towards possibly keeping rates on hold for many more years to come.
Given such a persistent message, it'll be interesting to see how this affects the greenback in the macro picture - especially if the global economy starts to improve next year.
Looking ahead today, the SNB should be a non-event with the ECB likely to adopt a similar tune but just be wary for any potential surprises.
0645 GMT - Swiss government releases their latest economic forecasts
Prior forecasts can be found here. These are usually seen as an accompaniment to the SNB forecasts, as such they aren't really all too important.
0700 GMT - Germany November final CPI figures
The preliminary report can be found here. As this is the final release, it isn't expected to have much impact - if any - on markets.
0730 GMT - Switzerland November producer and import prices
Prior release can be found here. A proxy gauge of inflationary pressures in the Swiss economy, which has continued to show increasing signs of weakness. A minor data point.
0745 GMT - France November final CPI figures
The preliminary report can be found here. As this is the final release, it isn't expected to have much impact - if any - on markets.
0830 GMT - SNB December monetary policy decision
Prior decision can be found here. The SNB is widely expected to leave its policy rate unchanged and reiterate a similar messaging to September. Given the lack of need to heavily intervene to limit the franc's strength, they may remain sidelined for a while more still. SNB chief Thomas Jordan will also be speaking after at around 0900 GMT.
1000 GMT - Eurozone October industrial production data
Prior release can be found here. An indication of factory activity in the euro area economy, which is expected to remain sluggish to start Q4.
1245 GMT - ECB December monetary policy decision
Prior decision can be found here. The ECB should reiterate a similar stance to October as they continue to push the button to lawmakers instead. The inflation messaging should remain the same as they are expected to stress the need for fiscal stimulus - though likely to come from Lagarde's press conference instead. The ECB will also release its latest staff projections today but I would expect only a minor upward revision to those.
1330 GMT - ECB president Lagarde press conference
I don't think there's much for Lagarde to play around in her first meeting/press conference. She could talk about a review of the ECB's strategy but is likely not to offer too much hints about what they may address or tweak. The divide within the governing council is just too difficult to get anything done at the moment so we'll see. Other than that, expect the reiteration on the need for fiscal stimulus to support the central bank as well as some acknowledgement of the negative side effects of NIRP. Purple #LagardeScarfGuesses
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading!
