{"id":105210,"date":"2017-04-25T06:57:04","date_gmt":"2017-04-25T10:57:04","guid":{"rendered":"http:\/\/countingpips.com\/?p=105210"},"modified":"2017-04-25T06:57:04","modified_gmt":"2017-04-25T10:57:04","slug":"markets-in-a-party-mode-will-the-ecb-stop-the-music","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2017\/04\/markets-in-a-party-mode-will-the-ecb-stop-the-music\/","title":{"rendered":"Markets in a party mode, will the ECB stop the music?"},"content":{"rendered":"
April 25, 2017<\/div>
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Article by ForexTime<\/a><\/p>\n

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The positive momentum driven by the outcome of the first round of voting in the French presidential elections extended into its second day. It now appears that investors are confident that Macron will be France\u2019s next president and will win the battle on 7 May easily.\u00a0 Investors who lost confidence in pollsters after they failed to predict the outcomes of the U.S. elections and Brexit vote are all of a sudden viewing them as credible source of information again. As a result, the French CAC rallied more than 4% to hit its highest levels since 2008, French bond yields declined sharply and the Euro jumped to a five-month high.<\/p>\n

The importance of this one single event was reflected in asset classes across the globe, but whether this rally will have legs depends on how big Macron wins. Macron would need to win with a margin of more than 60% in the second round to unite a divided country and ensure that the spread of populism ends in France.<\/p>\n

With concerns over the French election diminishing, traders will shift their attention towards monetary policy. While no changes to asset purchases or interest rates are expected during Thursday\u2019s ECB meeting, Mario Draghi\u2019s tone is what\u2019s going to guide the Euro. Leading economic indicators have seen a fair improvement within the Eurozone, but inflation levels that have slipped to 1.5% in March from 2% in February are likely to keep Mr. Draghi on the defensive. I don\u2019t expect much from this meeting, other than a reiteration of past statements, which is likely to cap Euro gains for now. Any hint of normalizing policy will push Euro above 1.10. However, I think this scenario is highly unlikely.<\/p>\n

Before the ECB meets on Thursday, Trump is due to deliver a \u201cbig announcement\u201d on tax reforms. I\u2019m becoming little concerned over the President\u2019s big announcements, especially since we haven\u2019t seen any major legislative achievement so far and he will be marking his 100th day in the White House this Saturday. I believe that a repeat of the healthcare reform failure will end up sending the Euro above 1.10 without the need of ECB\u2019s support.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

Disclaimer: <\/strong>The content in this article comprises personal opinions and should not be construed as containing personal and\/or other investment advice and\/or an offer of and\/or solicitation for any transactions in financial instruments and\/or a guarantee and\/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.<\/em><\/p>\n

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\"Forex-Time-Logo\"Article by ForexTime<\/a><\/span><\/strong><\/p>\n

ForexTime Ltd (FXTM)<\/strong> is an award winning international online forex broker regulated by CySEC 185\/12 www.forextime.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Article by ForexTime The positive momentum driven by the outcome of the first round of voting in the French presidential elections extended into its second day. It now appears that investors are confident that Macron will be France\u2019s next president and will win the battle on 7 May easily.\u00a0 Investors who lost confidence in pollsters […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-105210","post","type-post","status-publish","format-standard","hentry","no-post-thumbnail"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/105210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/comments?post=105210"}],"version-history":[{"count":2,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/105210\/revisions"}],"predecessor-version":[{"id":105214,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/posts\/105210\/revisions\/105214"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/media?parent=105210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/categories?post=105210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex\/wp-json\/wp\/v2\/tags?post=105210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}