Daily Alert – Thursday 8th September 2022: ECB expected to hike by 75 basis-points

Mark NugentDaily Alert, Sept 2022

Daily Alert – Thursday 8th September 2022: ECB expected to hike by 75 basis-points

Good morning.

Risk sentiment was indecisive yesterday, for the third successive day.

Euro-zone and Japanese GDP were positive and beat expectations. The Bank of Canada hiked rates by 75 basis-points as expected. Bank of England Governor Bailey blamed GBP weakness on USD strength, which is only partly true.

My trading ideas are yet to play out: I was not tempted into going long on equities due to the risk sentiment. The weak GBP/EUR vs strong USD setup has yet to fully develop. WTI took a significant move down through support which will ultimately give better pricing for an entry when it reverses. So, again, as I’ve said a few times this week, we need to be patient.

Looking ahead, the major issue on today’s calendar is the European Central Bank’s (ECB) rate and statement. A 75 basis-point hike is expected. This is pretty bullish. The extent to which the ECB will mirror the hawkishness shown by the Fed will become apparent in the statement and press conference.

Have a great weekend when it comes, and I’ll be back on Monday.

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