Today’s main event is the ECB meeting and press conference the European Central Bank is not expected to change its rate policy even though inflation has hit the 2% target for the first time since 2013 as uncertainties over the Euro area such as elections in France, Holland and Germany are likely to keep the ECB on hold.
Overnight we have seen the Dollar strengthen against all currencies after the ADP employment data came out very strong at 298.000 indicating a growing employment sector. As mentioned before, the Fed is now waiting for the NFP data on Friday to confirm its speculated rate rise in March, and judging from the ADP data, NFP is very likely NOT to disappoint.
S&P 500 index reversed early gains to close the day 0.2% lower, posting its third consecutive loss. This morning, stocks in Asia are struggling, with energy shares in particular under pressure after Brent crude oil prices fell 5.4% yesterday on a surge in US inventories.
AUD/USD was a very poor performer overnight, partly due to China data coming way below expectations hitting 6 week lows of 0.7505. EUR/USD has also dropped to a 1-week low of 1.0523 today. So far the 1.05 level has proved to be very resilient.
Gold also posted its 4th consecutive loss and continues down this road today, with the yellow metal reaching 1203 lows so far. Gold dropped 60 dollars so far since its peak on the 27th of February. Sterling was at seven-week lows, with GBP/USD at 1.2149
