ECB Meeting Talking Points:
- The June European Central Bank rate decision and policy meeting will arrive on Thursday, June 6 at 11:45 GMT.
- Ongoing soft PMI readings and eroding inflation expectations have raised the odds of the ECB taking dovish policy actions this week – but that much is already expected by FX markets.
- Recent changes in retail trader[1] positioning suggest that EURUSD[2] could trade higher in the coming days.
Join me on Mondays at 7:30 EDT/11:30 GMT[3] for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.
06/06 THURSDAY | 11:45 GMT | EUR European Central Bank Rate Decision
The European Central Bank meets this week to try and shore up investor confidence. With regional PMI readings stumbling and Eurozone inflation expectations sliding lower over the past several months, calls have grown for the ECB to take more substantive action at its June rate decision and policy meeting; the timing is primarily because new Staff Economic Projections will be released this week as well.
For the staff economic projections, traders should be expecting cuts to both the 2020 CPI and GDP forecasts, as well as a potential cut to the 2021 forecasts. The inflation outlook will be particularly interesting, insofar as inflation expectations have plummeted and such events have historically coincided with fresh stimulus from the ECB.
While new stimulus is unlikely this coming week, that is solely due to the previously announced TLTRO3 program which has yet
