ECB

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.

With inflation data and manufacturing data from both the US and the EU this week, EUR/USD could be volatile.

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

Rising interest rates and the end of bond buying from the European Central Bank (ECB) have led to concerns over fragmentation risk across the single currency bloc. Read on for an explanation of what fragmentation risk is – and what trading opportunities it may bring.

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

Lack of anti-fragmentation support packages from the ECB is unnerving investors

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.

Recent comments from ECB policymakers suggest that “gap” between interest rates on the two sides of the Atlantic will be smaller than expected...

The ECB is providing more hawkish comments while the BOE is less sanguine due to slow expected growth.

Traders should watch the change in expectations of interest rates vs current rates.

Investors have welcomed Macron’s performance in the French election debate, while Ukraine conflict is no longer having the same impact on asset prices

Despite higher inflation, the ECB maintained its path for asset purchases and offered little new guidance.

The Singapore dollar made the baulk of currency moves overnight as the MAS tightened policy. We don’t expect the same level of excitement from the ECB.

The ECB is due to announce its interest rate decision on Thursday at 12:45 GMT to a deteriorating economic backdrop. No change to policy is expected.

ECB’s Holzmann wants to raise key interest rates to 0% by yearend.

Although the ECB pledged to speed up the pace of bond tapering, it also increased its forecast for inflation and lowered its forecast for growth.