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Economic calendar: Key day of the week

- Emergency Brexit summit to be held today
- Will Draghi provide more details on banks’ financing?
- Minutes will reveal whether Fed members discussed a rate cut or not

Wednesday is definitely the most important day of this week. Number of key readings, ECB meeting, FOMC minutes will surely make the day interesting. Apart from that, emergency Brexit summit begins today so UK assets are likely to enjoy elevated volatility throughout the day.

Brexit (whole day)

The emergency Brexit summit has been called for today by the European Council President, Donald Tusk, once the UK lawmakers kept failing to agree on any kind of a solution. Leaders of the EU member states will meet today to discuss what to do next. Theresa May’s request for short extension was rejected by Tusk as he said it would create a vicious circle of extensions. On the other hand, EU leaders are said to push for extension until December 2019 or March 2020 - a development that could encourage the UK parliament to oust May. Note that stakes are high as the United Kingdom has just 2 days to decide whether to take part in EU elections, leave without a deal or reach some kind of extension agreement with the European Union.

9:30 am CET - Data pack from the United Kingdom. While the attention of the GBP traders will be mostly focused on Brexit summit, one should not forget about regular data releases. Industrial, manufacturing and construction production data will be released today but in each case a deterioration is expected. The GDP reading for February is forecasted to show lack growth in February (0.0% MoM).

12:45 pm CET - ECB rate decision. The European Central Bank is unlikely to make any changes to the level of interest rates today. However, market participants are mostly interested in more details concerning new round of financing for banks. Press conference of President Draghi (1:30 pm CET) will be crucial as journalists’ questions may address issues omitted in a statement.

1:30 pm CET - US, CPI inflation for March. The US inflation decelerated significantly since mid-2018 and remains below Fed target. The Federal Reserve do not plan to deliver any rate hikes this year but may be forced to slash rates in case price growth continues to slow. However, as oil prices surged in March there is a high chance that at least headline measure will improve.

3:30 pm CET - DOE report on oil inventories. Alexander Novak, the Russian Energy Minister, said that Russia is still not sure whether to cooperate with the OPEC+ group on the output cuts in the second half of the year. Such an uncertainty pushed crude prices lower yesterday and the commodity may decline further in case inventories’ data turns to be downbeat. Note that yesterday’s API print showed bigger than expected build of 4.1 million barrels.

7:00 pm CET - FOMC minutes. The Federal Reserve ruled out any rate hikes until the end of the year during the latest meeting. This was somewhat expected. However, investors became concerned that the Fed may actually consider slashing borrowing costs in the nearby future in order to support the economy. Having said that, one should look for hints on any possible rate cuts in today’s Minutes.

EURUSD tries to recoup some losses following a retest of the early-March low around 1.1185 handle. An EUR-positive mix from two central banks could provide bulls with more fuel but key resistance zone above the 1.13 handle may limit potential recovery. Source: xStation5

BREAKING: US services rise at record pace: ISM
BREAKING: USD plunges after downbeat NFP report
Chart of the day - USDCAD (03.12.2021)
Morning wrap (03.12.2021)
Daily summary: US stocks rebound, OPEC+ sticks to production plan