ECB meeting is a major focus for today, but expectations are rather low. No change in monetary policy is expected. Also, updated economic projections will not be released until June.
Even though US yields continued their march higher, European yields have stabilized since the central bank announced to accelerated significantly the pace of PEPP purchases back in mid-march. ECB will likely reiterate that the increase in PEPP purchases will continue until June. The question is whether there would be hints on scaling back the monthly purchases after that.
Here are some previews:
- ECB Preview – Looking for Hints on PEPP Destiny
- ECB to Stay the Course But Euro Spike Could be Worrisome
- ECB Preview: Christine Lagarde Will Have To Kick The Can Down The Tightrope
- ECB Preview: An Appetizer For The June Meeting
- ECB Meeting in Focus
Euro has been relatively firm this month, up against most except Swiss Franc and Kiwi. Yet, upside momentum is disappointing so far. There is follow through buying, even against Yen. Price actions against Sterling Aussie are corrective in a down trend setting. The better performance is seen against Dollar only.
At this point, as long as 1.1941 support holds, we’re still expecting EUR/USD’s rebound from 1.1703 to continue to retest 1.2242/2348 resistance zone. But that would more likely be due to Dollar’s own weakness.
