#ForexChief #Euro #ECB #market #forexnews #stocks #worldnews #ChristineLagarde⠀
👉 Euro seeks reasons for optimism
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⚠️ Major players are ready to buy Euro-assets, although the fundamental and macroeconomic background does not encourage this. We still expect a strong fall in the European currency, but at this time the market prefers to think in other categories.
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Tomorrow the inflation report for December will be published and, according to experts' forecasts, the figure may drop to 9.2%. Recall that the current ECB rate is only 2.5%, so hardly anyone expects that in February the regulator will once again slow down the key rate increase.
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If the December forecasts come true, then this will be only the second decline in inflation in a row. It is too early to draw any conclusions.
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If you remember, at the beginning of last year, Christine Lagarde repeatedly complained about rising energy prices, which "accelerated" inflation. Now the situation is reversed. Now European inflation is falling due to falling gas and oil prices, and its current dynamics do not reflect the real state of the economy.
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Accordingly, if oil and gas prices begin to grow again (some experts are again waiting for oil in the $100 zone), then the consumer price index will get a fresh acceleration. Thus, hawkish expectations towards the ECB are maintained with a 100% probability.
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This week Lagarade will appear before the press twice - on Thursday and on Friday. Since the February meeting is already looming on the horizon, these public arguments of the head of the ECB are worth listening to carefully. Moreover, a general strike of trade unions against pension reform is scheduled for Thursday in France.
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If Lady Christine confirms the regulator's intention to raise the rate by another 0.5%, and then by another 0.5%, this will be an active positive for the euro. If there is no clear signal from the ECB, large purchases are unlikely. The correction will still be brewing, but the market will decide for itself whether it is worth starting it.
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Profits to y’all!