European Central Bank’s turn to blink: Raises key interest rate from negative to negligible
Madame Christine Lagarde, currently head of the European Central Bank (ECB), was in such a rush to quit her previous job as head of the International Monetary Fund (IMF, where she lent a record $44 billion to serial defaulter Argentina), that replacing (Super) Mario Draghi at the ECB seemed a shoe-in. A decade on from the Greek and Southern European sovereign debt crisis, today the Eurozone also has to face Italy with no head of government (because popular Mario’s political coalition collapsed), consumer confidence at a record low and Russian gas via the Nordstream 1 pipeline seriously constrained. So the ECB decides to hike the key rate by a marginally higher than expected 50 basis points instead of just 25. Great! The first chart shows the reaction in the front-month Euribor futures contract which dropped from a high at 99.230 this morning to 99.025.
Interestingly further out contracts, the red and the green ones as they’re called, moved less, the December 2022 dipping from 98.620 to 98.460; June 2023 from 98.340 to 98.220 and June 2024 from 98.340 to 98.240. One way or another you can see that all contracts are within 10 or 20 basis points from where they were before today’s interest rate decision and above their June low point. Added to that, volumes have been shrinking steadily in July.
Plus ça change!
Charts courtesy of Metastock Xenith by Refinitiv
Tags: ECB, Euribor, Eurozone, expectations
The views and opinions expressed on the STA’s blog do not necessarily represent those of the Society of Technical Analysts (the “STA”), or of any officer, director or member of the STA. The STA makes no representations as to the accuracy, completeness, or reliability of any information on the blog or found by following any link on blog, and none of the STA, STA Administrative Services or any current or past executive board members are liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. None of the information on the STA’s blog constitutes investment advice.
- Looking forwards and backwards: At this time of year December 2, 2022
- Long term weather forecast for power trading: Webinar from Refinitiv 17 November 2022 November 23, 2022
- ‘Are you delusional?’: The title of Victoria Shepherd’s recent magazine article November 14, 2022
- Larry the lad looking good: Despite trading since 1962 November 11, 2022
- The Day of the (Living) Dead: Ghosts and ghouls at this time of year November 1, 2022
- A fireside chat with author Jack D Schwager: He of Market Wizards fame on
- Market Wizards – and their lesser known cohorts: Jack Schwager hits the book launch circuit on
- Colours, clashes and clichés: How and why use colourful charts on
- Do you know Aroon? I do, but not very well on
- Must read classics: Richard W Schabacker – the real bible of technical analysis on