The Euro crashed yesterday after the ECB cut its growth forecasts dramatically and revised plans to end stimulus. The single currency is now trading at its lowest level since mid-2017 after Mario Draghi advised the market that the ECB now see’s the EU’s GDP sitting at 1.1% for 2019 as opposed to the previous estimate of 1.7%. The Dxy is now threatening 2018 highs and a clean break could see it drive up to challenge the 100 level. Global stock markets sank as the negative sentiment swept through the market with the majority of indices finishing their days well in the red, the Nasdaq led the way in the US session closing down 1.13% with the S&P and Dow not far behind down 0.81% and 0.78% respectively. Commodity markets remained stable with Oil trading around familiar levels and Gold continuing to consolidate above the 1280.00 support level.
Sentiment has certainly turned as this week has progressed and investors are now looking at more downside projections. Central banks seem to be preparing for a tough next few quarters with a much more pronounced dovish tone coming from many governors over recent announcements. The market will turn it’s attention to the US today with the latest Non-Farm Payrolls data due and investors will be hoping for some positive numbers to lift the doom and gloom which seems to have gripped sentiment over the last few days. Expectation is for a print of around 180k with Average Hourly earnings at 0.3% and anything coming out dramatically lower than there could see an acceleration to the downside momentum.
Looking at the rest of todays trading and the Asian market will be watching closely for the latest Trade Balance numbers out of China with expectation sitting around 257bio. There is little in the way of tier 1 data due out in the London session and expect rangebound markets ahead of the US open and the Non-Farm Payrolls release. Loonie traders will note that the Canadian employment data is due out at the same time as the US numbers which can make for tricky trading conditions over the release.