Article / 08 September 2016 at 7:00 GMT

Morning Markets: ECB steals the limelight from Fed and BoJ




  • European Central Bank Announcement & Press Conference (1145 GMT & 1230 GMT)
  • US: Initial Jobless Claims (1230 GMT)
  • US: Bloomberg Consumer Comfort Index (1345 GMT)
With just under two weeks to go to the crunch Federal Reserve and Bank of Japan policy meetings the market's attention this session will be fixed on the European Central Bank's preemptive session today. Here, the consensus expectation is for monetary policy to be held steady (benchmark refi rate at 0% and the deposit rate at -0.4%) but with the possibility that ECB chief Mario Draghi will announce an extension of his asset-purchase programme by six months as far as September of next year.

The ECB will also present a new batch of quarterly forecasts — the first such update since the UK's decision to leave the European Union. These are expected to reveal slightly weaker economic growth and inflation rates than were predicted back in the previous June forecast.

Finally, overnight Asian trading was mixed with an equity reversal in Japan and gains in China following some surprisingly strong economic data there which showed solid gains in both imports and exports.

Market signals

Asian session

  • Asian markets opened mixed ahead of China data
  • The ASX was off 1% early, the Nikkei down 0.18%, while the Kospi was up 0.41%
  • Chinese imports unexpectedly rose in August for the first time in nearly two years
  • Australia's trade gap narrowed more than expected due to volatile gold exports
  • It remains in the red with a deficit of $A2.4bn in July; $A2.7bn was expected
  • Japan’s current account rose to a seasonally adjusted ¥1.45T
  • Its quarter-on-quarter growth was revised higher to 0.2% in the three months to June 30

Forex ahead

  • The US dollar was fetching 101.78 yen in early Asian trade
  • The AUD continues to fall against the NZD. In early trade it was fetching $NZ1.0289 

From the Floor

Launch squib. ”What Apple came out with yesterday is not going to change the short to mid-term,” says Garnry.

Oil fillip. “China import data hit a four-month high to send oil markets higher,” says Hansen.

Get all the latest from Saxo Bank's trading floors in From the Floor, within the hour.

In opinion

What can the ECB do when the economic indicators show little but slowing growth? It can do nothing, says James Picerno.

ASX floundering
It didn't seem to matter that leads from overseas were buoyant – the ASX went on its own slide for no particular good reason, says Saxo Capital Markets in Sydney.

Waiting for the ECB
Stocks are flat ahead of the rates decision on Thursday, with markets pricing in only a 10.6% probability of a cut, writes the Saxo APAC Sales Trading team.


 Another day, another decision for the European Central Bank. Pic: iStock

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