The EURUSD is trading at 1.1026 as the press conference begins. The high for the day has reached 1.1032 after the decision. The 100 hour MA looms above at 1.10416
Headlines from commentary:
- Recovery is facing headwinds
- Expect the recovery to strengthen.
- Fading monetary policy restrictions should support economy.
- Labor market remains resilient.
- Surveys point to further moderation and demand for labor
- Goods inflation and services inflations move in opposite directions.
- Negotiated wage growth will remain high and volatile for the rest of 2024. Overall labor cost growth moderating.
- Unit labor costs to continue declining owing to lower wage growth in recovery and increased productivity
- Risks to growth remain and are skewed to the downside
- Growth could be higher if inflation comes down quicker than expectations., or the world economy grows stronger than expectations.
- Wages/profits/trade tensions potential for upside risks for inflation.
- Extreme weather events and global warming could drive up food prices.
For the full pre-Q&A commentary CLICK HERE
Q&A begins with the EURUSD at 1.10254
- The decision to cut the deposit rate by 25 basis points was unanimous.
- Data comforts us that we are heading to targets
- We expect inflation to the client toward are to present target.
- Given our inflation expectations it was prudent to cut our deposit facility rate by 25 basis points.
- We expect inflation to return to 2% by the end of 2025. Has reinforce our confidence in solidity, robustness of projections.
- Declining path for rates pretty obvious.
- September will likely deliver a low inflation reading due to energy.
- However inflation to rise again in Q4.
- We are not just looking at one indicator but a whole range of data.
- ECB path on rates is not predetermined. No commitment of any kind about October meeting (which is six weeks away).
- Need to be attentive to risk of below target inflation.
- Services inflation is clearly the component of prices that require monitoring. Holiday packages, insurances are leading the rise in the services inflation.
- Expects services inflation to decline in 2025 due to wage moderation growth.
The EURUSD has moved higher to test its falling 100-hour moving average at 1.10407, but found willing sellers against the level. The price is back down trading at 1.1029 currently (at 9:28 AM ET).