Morning Report: 06.30 London
- The euro staged its second largest rally in history yesterday against the US dollar, with extended gains again this morning. Markets were expecting more from Mario Draghi and were betting on the ECB president bringing out the big guns to combat eurozone deflation. Instead, he announced rate cuts and easing activities that were much less than expected mostly an extension rather than an expansion of policy.
- The US dollar dropped sharply on the news as the euro counterweight pushed higher. The stakes are now raised even higher for today’s Non Farm Payroll report.
- Other dollar pairs have capitalised on the news, with the pound and Australian dollar pushing higher. The Aussie is nipping back this morning however.
Coming up today:
- Today’s main item is US Non Farm Payrolls at 13.30 relealsed alongside unemployment and earnings data. The headline jobs number is expected to be around 201k.
- Canadian jobs data is released at the same time.
Trade Idea:
- The euro shot higher yesterday after Mario Draghi failed to exceed market expectations. The question is whether Draghi will make the same mistake again?
- Policy makers are not immune to market reactions and there is a possibility that Draghi will go a little further in the ECB’s next meeting. As such we could see the euro’s advance reverse.
- A good way to play this is a LOWER trade predicting that the EUR/GBP will close below 0.7200 in 20 days time for a potential return of 130%.
This is presented as an idea to stimulate fixed odds financial betting ideas and is not financial advice.
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