ECB

ECB provided no forward guidance and/or commitment to future hikes...

The SNB (Swiss National Bank) has swept in to provide much needed liquidity to Credit Suisse, which should soothe some concerns over risk to the financial system.

Hot inflation is likely to outweigh concerns over financial stability, potentially leading the ECB to disappoint market’s substantial re-pricing of policy rates.

The ECB had already planned a half-point rate move in March, and these stronger readings are likely to bolster officials who say that more big moves are needed beyond that to get inflation under control.

During the press conference, Christine Lagarde seemed to be talking out of both sides of her mouth.

With the Fed having delivered their 25bp yesterday, it is now over to the BOE and ECB today who are expected to hike by 100bp between them.

With a double bottom target and a flag target above, EUR/AUD still has some work to do.

With Thursday’s poor economic data and the Fed still hiking rates (albeit at a slower pace), a recession may be in the cards for the US!

Hawkish ECB speakers over the last few days, combined with the lack of BOE speakers, have sent EUR/GBP to its highest level since July 6th.

The ECB has indicated that further normalisation of interest rates “will be appropriate.”

The key question for EUR/AUD is, “Will the ECB be more hawkish than the RBA?”

Will central banks be able to raise rates fast enough to keep higher inflation at bay, while simultaneously keeping the world out of a recession?

Inflation hits a fresh record high in the Eurozone

The EUR/JPY should remain supported on the dips, keeping that path of least resistance to the upside.

Major central banks around the world, except for the BOJ, are in tightening mode on the back of increasing inflation.

Euro rebounds as ECB tries to address fragmentation risks, ahead of a likely 75 basis point hike from the Fed

If yields rise and spreads widen between the peripheral countries and the core countries, the ECB could re-enter the market and buy debt of the peripheral countries to bring down yields.