ECB on the agenda.

The ECB has an interest rate meeting today. There is an expectation for a rate cut and dovish narrative. I have read an article suggesting the dovish sentiment for the EURO is a little overdone and a 'hawkish cut' could see the EUR strengthen today. It will be interesting to see how it plays out.

In other news, slightly higher than forecast core CPI initially caused concern. But a deeper look at the data suggests disinflation is still on track. Which caused another down and up day, overall, it appears the market is now comfortable with a 0.25bp cut from the FED. Combined with fresh comments from the BOJ suggesting another rate hike is still a little way off. The VIX is down and I'm 'mildy optimistic' that 'risk on soft landing' trades are going to be viable again.

For now, I'm going to wait for the ECB meeting. And if nothing changes, I'm of the view 'risk on' trades could be viable, at least in the run up to next week's FOMC meeting.

Feel free to email any questions: johnelfedforexblog@gmail.com