ECB hints optionality on QE and Cuts (as expected) but not imminent
US Durable Goods tumble YoY despite June rebound
EU rejects BoJo demand of scrapping Irish Backstop (as expected)
Bumpy day in the market after the ECB meeting. The outcome is puzzling, especially for EUR bears expecting some further clarity on the intention of the ECB going forward given the recent disastrous round of data. Draghi doesn't trow in the towel, hinting cuts and further stimulus ahead, but without clarifying whether that will happen in September. The reaction translated into a "dovish disappointment" that saw a bounce in Yields and a squeeze higher in the EUR. The rest of the session was pretty much the digestion of Draghi's speech.
Global equities slide after Draghi disappoints dovish expectations. Dax was the biggest underperformer as European Yield rise. US Stocks traded negative dragged by European Indicies. SP500 traded firm above the 3000 mark despite the positive move in Yields.
The FX space traded mix amid mild EUR strength following Draghi speech and a negative performance among the remainder of the G10 dollar counterparts. In my opinion, the fact that Draghi didn't overdeliver is a logical consequence of having a limited toolkit of ammunition if relative to the FED.
Crude traded choppy above the 56 level. Gold spiked lower after the technical break of the long-term trend line. Contained reaction though after the retest of the 1415 level to the downside.
US 10Y Yields poised to have their first positive monthly performance since April. ________________ EU Close
If you missed the morning briefing from the desk click HERE