Economic calendar: What message will ECB send to the markets?

Summary:
- Detailed data for Q4 from euro area scheduled for release in the morning
- ECB may lower economic forecasts today, decision at 12:45 pm GMT
- Fed’s Brainard to discuss monetary policy outlook at Princeton University

Economic calendar on Thursday is dominate by readings and events from the Old Continent. A pack of the economic data for Q4 2018 will be released by Eurostat at 10:00 am GMT. However, today’s key event will occur at 12:45 pm GMT as the European Central Bank is set to announce interest rate decision. Presser of Mario Draghi will begin 45 minutes later. Apart from that, Fed member Brainard is scheduled to discuss economy and monetary policy outlook at Princeton University (5:15 pm GMT). Q&A session will be held afterwards therefore there is a scope for some more volatility on the USD market.

10:00 am GMT - Euro area, data pack for Q4 2018. Eurostat will release a batch of revised data for the final quarter of 2018 today. While any major deviations from the initial readings are unlikely to occur, final readings are worth to watch as they include contribution data. Having said that, today’s GDP and employment data may shed some more light onto which sectors are being impacted the most by deteriorating economic conditions. Nevertheless, investors should not expect any major price moves in the aftermath of the release.

12:45 pm GMT - ECB interest rate decision. Rumours surfaced lately saying that the European Central Bank may decide to implement tools aimed at supporting troubled banking sector. Lowering deposit rate or introducing new round of TLTROs could support European lenders and at the same time help tackle economic slowdown by boosting credit action. However, it is unlikely that such measure would be announced today. Nevertheless, ECB may lower economic forecasts today, a move that could be seen as predecessor of more expansionary approach. ECB President, Mario Draghi, will hold post-meeting press conference at 1:30 pm GMT.

Central bank speakers scheduled for today:
- 9:00 am GMT - BoE’s Tenreyro
- 1:30 pm GMT - ECB President Draghi
- 5:00 pm GMT - BoC’s Patterson
- 5:15 pm GMT - Fed’s Brainard

While EURUSD has been range trading for some time already, the pair was more often visiting the lower limit of the range rather than the higher one. A sequence of lower highs raises questions over possible EUR rebound. However, unless the pair paints a lower low potential for longer downward move remains limited. Source: xStation5

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