The doves’ race. | MarketTalk: What’s up today? | Swissquote

Show notes

Yesterday’s European Central Bank (ECB) meeting and Lagarde’s press conference went according to the plan. The ECB left its rates unchanged for the fourth straight meeting, lowered its inflation forecasts, predicted that inflation will reach the 2% target by next year and suppressed its growth forecast for this year. Still, Lagarde said that they aren’t ‘sufficiently confident’ in inflation to lower rates but that they ‘will know a little bit more in April and that they will know a lot more in June’. It was heard as ‘we will start cutting the rates in June if inflation continues to ease as predicted’. The dovish message was well received from the market: the Eurozone bond yields fell, the Stoxx 600 hit a fresh record, but the EURUSD extended gains above the 1.0955 as the US dollar fell more than the euro did as the Federal Reserve (Fed) Chair Jerome Powell reiterated that rate reduction in the US ‘can and will begin’ this year.
Due today, the US jobs data will either keep the doves in charge the market or temper enthusiasm. Attention will shift to the US CPI next week.
Elsewhere, Japanese stocks fell below 40’000 level as the USDJPY tumbled below the 148 level on rising speculation that the Bank of Japan (BoJ) could be closer to exiting the negative rates than many think and rebound in Chinese stocks began losing steam.
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