Daily Alert – Thursday 14th September 2023: ECB hikes, now focused on duration

Mark NugentDaily Alert, Sept 2023

Daily Alert – Thursday 14th September 2023: ECB hikes, now focused on duration

Good afternoon.

Today’s fun was provided by the European Central Bank (ECB). The bank increased the “on deposit” rate by 25 basis-points to an unprecedented 4.0%. This is the tenth consecutive hike. The cycle started in July 2022, when the rate was -0.5%.

Although markets were taken by surprise, President Lagarde signalled strongly that the hiking cycle was over, and the focus was now on the likely duration of the peak rate. She said that a rate cut “was not even a word that we have pronounced.”

The Euro fell, driven by the possible harm this hike may do to the faltering eurozone economy and on the likelihood that the cycle was over.

I closed my failing WTI trade for a small loss of around 0.4%. I then re-entered the trade at last night’s close as there was strong buying into the close and the setup was better than the one I took to get into the loss-making trade I had just closed. I was a bit aggressive with the stoploss and so far, it is doing nicely, and we should see a profit over the two trades.

The major economic events of the week are over. I wish you a great weekend when it comes, and I’ll be back on Monday.

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