ECB the main event on the agenda today
The owl's legacy as ECB president is already going to be defined by her actions today.
After the Fed and BOE performed emergency rate cuts, you would think that the ECB will be compelled to do something today. However, the difference here being that they have very, very limited ammunition to work with.
Much like the BOJ, the ECB just don't have room to maneuver and as you would see, the suggestion yesterday is that the BOJ might just expand ETF purchases next week.
Similarly, the ECB will likely take steps to inject more liquidity and probably make financing conditions easier as delving further into NIRP and QE (depending on the size) isn't really sending much of a strong message considering where they are at now.
1000 GMT - Eurozone January industrial production
Prior release can be found here. Industrial production is expected to rebound after a poor December reading but again, this relates to pre-virus economic conditions so it isn't one that the market will focus on.
1245 GMT - ECB announces March monetary policy decision
The January rate decision can be found here. The market has priced in a ~13 bps rate cut by the ECB this time around but there is no guarantee that they will really deliver with rates already in negative territory. An additional 10 bps rate cut will not mean much but it will speak more about Lagarde's credibility in leading the central bank. Instead, one of the more key options would be to ease terms of their TLTROs or follow the BOE into offering a new program tailored to help small businesses. This is especially likely after Lagarde talked about "super-cheap funding" yesterday to European leaders.
1330 GMT - ECB president Lagarde press conferernce
As the ECB continues to be pushed into a corner, expect Lagarde's speech to focus on the need for governments to step up fiscal policy. She may go hard on lawmakers here, since they haven't really walked the walk after talking the talk.
That's all for the session today. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
