Article Highlights

  • U.S. initial jobless claims at 243K vs. 239K forecast, 223K previous
  • U.S. import prices up 0.2% vs. projected 0.1% uptick
  • ECB Gov Draghi: No more sense of urgency to ease due to deflation risks
  • Draghi: ECB growth and inflation updates conditional on policy measures
  • Draghi assured that the euro is here to stay even with election uncertainties
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All eyes and ears were or ECB head honcho Mario Draghi as he held a presser after their rate decision and announced a few key changes.

Major Events:

ECB press conference – After keeping interest rates unchanged as expected and upgrading their growth and inflation forecasts, the ECB held a press conference that allowed Governor Draghi to shed more light on their latest decision and future moves.

Contrary to his previous tone, Draghi no longer emphasized that the ECB is ready to use all monetary policy tools at its disposal to boost inflation. He explained that he removed this phrase because there is no longer any sense of urgency to act as deflationary risks have subsided. He did admit that a substantial degree of monetary accommodation is still needed to support underlying inflation and keep headline inflation afloat.

“Underlying inflation pressures continue to remain subdued, the Governing Council will continue to look through changes in HICP inflation if judged to be transient and to have no implication for the medium-term outlook for price stability,” Draghi explained.

When asked about the stability of the euro, the ECB head honcho assured that the shared currency is here to stay and that they are not feeling nervous about elections in its biggest nations.

U.S. data in line with consensus – So far so good for Uncle Sam! Medium-tier reports continued to keep dollar traders hopeful that the Fed can hike interest rates this month, although there’s still a considerable amount of nervousness ahead of today’s NFP release.

The initial jobless claims report printed a 243K figure, higher than the earlier 223K increase in first-time unemployment benefits claimants and the projected 239K reading. Meanwhile, import prices advanced by 0.2% in February, outpacing the consensus at 0.1% and signaling stronger pressure on domestic inflation. The January reading was also upgraded from 0.4% to 0.6%.

Major Market Movers:

EUR –  The euro popped higher against its peers on the shift in Dovish Draghi’s bias to a less downbeat one.

EUR/USD rose from a low of 1.0545 to a high of 1.0615, EUR/JPY spiked from 120.90 to a high of 121.89, EUR/GBP is up to the .8700 handle, and EUR/AUD is testing the resistance at 1.4100.

Watch Out For:

  • 11:50 pm GMT: Japanese BSI manufacturing index
  • 12:30 am GMT: Australia home loans (-0.9% expected, 0.4% previous)

See also:

London Session Recap

Asian Session Recap

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