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FXPrimus’s Daily Market Analysis is provided by their in-house FX Market Specialist, Stavros Tousios.

Missing Confidence in Core Inflation Keeps Draghi Hesitant with Interest Rates, Hike Priced in for Summer 2019

President Draghi reaffirmed ECB’s guidance to end QE by December 2018 and leave rates unchanged through summer 2019 as core inflation stubbornly hangs around 0.9% YoY despite regular inflation reached the 2% target.

The dovish post-rate announcement sent trade-talk-positive Euro lower following no changes in ECB’s policy guidance.

Euro was not the only weak currency yesterday.

The Chinese Yuan softened again after a rather short-lived breather on Wednesday as huge $44B chipmakers’ deal collapsed amid the US-China trade feud.

S&P also declined after online social media and networking mammoth Facebook plummeted by 20% following a post-earnings announcement that revenues are expected to slow down, scrapping equities’ positive sentiment from a successful Junker-Trump meeting.

Looking at the ecocal today, US fundamentals are expected to dominate the session with the US Q2 GDP, Fed’s PCE inflation and UoM’s Consumer Sentiment indicators on the spotlight.

Today’s Important Indicators

Major Market Updates

• EUR/USD – Euro plunges after dovish Draghi as he reaffirms end 2018 QE termination and summer 2019 rate hike, price dragged down by sentiment towards the bottom of 1.1743-1.1629 range.
• GBP/USD – Pounds follows Euro down as Brexit chief negotiator Barnier adds uncertainty against UK’s white paper by saying that “EU will not delegate excises duty collection to a non-member”, $1.31 next.
• USD/JPY – Dollar-Yen ends sesion mixed on flat US Yields in spite of soft US data as Euro weakness allows Dollar to counter-balance losses, price still near 111 handle while investors eye the US GDP.
• USOIL – Oil mixed as price struggles to pierce top of ascending channel, volumes were low but investors may increase their positions on week-end flows.
• WTI stable near $69 per barrel.
• XAU/USD – Softer Euro sends Gold lower towards $1220 scrapping off yesterday’s gains on Junker-Trump trade-talks but still near trendline, investors shift focus to an array of major US data.
• BTC/USD – Bitcoin falls to dynamic $7850 support to form area of retest after Gemini exchange’s Winklevoss ETF proposal gets rejected by SEC for a second time, price shows no bearish signs.
• US Equities – Facebook suffers huge losses by plummeting 18.96% lower, Alphabet up by 0.75% after positive earnings report.
• US Indexes – DJ rose by 0.44% yesterday, S&P 500 dragged down 0.30% by Facebook.
• European Indexes – UK 100 and DE 30 open 0.36% and 0.14% higher, respectively.
• Asian Indexes – ASX 200 climbed 0.85% higher, Nikkei appreciated by 0.56% and Hang Seng trades 0.11% lower.