The European Central Bank is set to further ease its monetary policy this week. Mario Draghi has been hinting at further action for weeks, and with his reputation having taken somewhat of a bruising after the exaggerated promises that preceded the December meeting, surely he will be able to deliver this time around. However, there are interesting comparisons to the December meeting that so incredibly disappointed the market (who had drastically over-priced the extent of the easing). So how are we set up going into this week’s policy announcement? Have the markets made the same mistake again with the ECB set to disappoint again this week, or are they adequately prepared this time around? What is the expectation and what could the ECB be set to do? Aside from the ECB meeting, there are also key data releases from China to watch for and two other major central banks set to announce policy.
How are the forex markets set up moving into the meeting. The US dollar has been rallying recently but there are now questions over whether this can continue. We take a look at the other driving factors behind the moves in forex and also what to look out for this week. We also have a technical analysis of EUR/USD in front of the ECB meeting and also a significant breakout on the Aussie dollar.
We also take a look at the key developments on the major global equity markets and look at whether these key rallies can last the pace. A technical analysis of the German DAX and FTSE 100 also look at the major levels and crucial indicators to watch out for this week. We end with a look at the key commodity and bond markets, with the rally in oil such an important development for general market sentiment. The report ends with a technical analysis of gold and Brent Crude.