ZuluTrade Blog

Market Recap – The Time of the Central Bankers

Market View | Wednesday, June 19, 2019 10:27 AM GMT

The annual forum on Central Banking, organized by the ECB, had a significant impact on the markets. Mario Draghi’s quote “If the crisis has shown anything, it is that we will use all the flexibility within our mandate to fulfil our mandate – and we will do so again to answer any challenges to price stability in the future” was enough to send equities higher, EUR lower and the French government yields at negative territory. Yesterday has been a new record for the total amount of negative yielding bonds. Markets are now pricing in a probability of a September European rate cut at 87%.

Today at 19.00GMT, the FED is announcing its monetary decision. Markets are giving a 75% probability that no change of the main rate will be announced, but at the same time markets are giving a 65% probability that there is going to be a rate cut at the next meeting on the 31st of July.

A third round of votes will be held for the leadership race of the UK’s Conservative party. The winner is expected to be announced within the week commencing on 22 July.

Meanwhile, President Trump revealed that he had a constructive telephone conversation with President Xi and negotiators from both sides are expected to start preparing the two leaders’ meeting at the upcoming G-20 summit, scheduled for 28 and 29 June.

Macro releases: Besides the FOMC meeting, the UK’s and Canadian inflation releases are scheduled for today.

 

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