This is what you need to know to trade today Wednesday June 15:
The news that the European Central Bank (ECB) will hold an ad hoc meeting of the Governing Council to discuss current market conditionsspecifically the drop in bonds, has caused a rally in the common currency at the start of the European session on Wednesday. Waiting for the decision of the US Federal Reserve on interest rates, the dollar index started to pull away from multi-decade highs it hit at 105.65 late on Tuesday. In Europe, data on industrial production will be published and the president of the ECB, Christine Lagarde, will speak at 16:20 GMT. The US Census Bureau will also release retail sales data for May.
In her speech on Tuesday, Isabel Schnabel, a member of the Governing Council of the ECB, stated that monetary policy can and should respond to a disorderly revaluation of risk premiums. “We will react to new emergencies with existing and potentially new tools,” Schnabel added, noting that they are closely following current market developments.
market expectations point to a 50 basis point Fed interest rate hike. However, reports from earlier this week set the stage for a 75 basis point rally and CME Group’s FedWatch tool shows that markets are pricing in a 90% chance that the Fed will raise its interest rate by a total of 150 basis points in the next two meetings.
See: Fed Preview: Powell will sink markets or raise yields, dollar win-win, five scenarios
See: June Fed Preview: In the world we live in, a 0.50% hike is a bearish surprise
Earlier in the day, data from China revealed that industrial production expanded 0.7% annually in May, compared to the market expectation of a contraction of 0.7%. Also, retail sales decreased 6.7% in the same period, but this reading was better than analysts’ estimate of a 7.1% drop.
The EUR/USD rallied sharply towards 1.0500 as an immediate reaction to Wednesday’s ECB news. Italian 10-year government bond yields are down more than 8% in European morning and Eurostoxx futures are trading positive.
The GBP/USD is holding on to modest gains above 1.2000 early on Wednesday. The EUR/GBP advances to its highest level since late April above 0.8700, making it difficult for GBP/USD to gain traction. The BBC reported on Tuesday that the European Union was preparing to take legal action against the UK for the changes made in the agreements after Brexit.
The USD/JPY it has broken below 135.00 on Wednesday and is now trading negative near 134.50. Japanese Chief Cabinet Secretary Hirokazu Matsuno reiterated on Wednesday that the authorities they will take appropriate measures in the foreign exchange market if necessary.
The Prayed is taking advantage of the pullback in US Treasury yields early on Wednesday and is trading near $1,820 after falling for two days.
Pending first quarter gross domestic product GDP data from New Zealand, the NZD/USD trades above 0.6200. In the early hours of the Asian session on Thursday, the Reserve Bank of Australia will release its Q1 Bulletin and the Australian Bureau of Statistics will release its May employment report. The AUD/USDwhich fell to its lowest level since early May at 0.6850 on Tuesday, now trades in strong daily gains at 0.6910.
The Bitcoin It trades at its lowest level since December at $21,200 as of early Wednesday, down more than 4% on the day. The ethereum drop 7% and test $1,100.
Source: Fx Street
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