Today the European Central Bank is holding its monthly monetary policy meeting, which is one of the major highlights of the day. The ECB is not expected to make any adjustments to the interest rate, despite earlier indications that it wants investors to believe a rate cut is still possible in 2021.
However, the central bank could address concerns over the quickly rising yields on European bonds by expanding its own bond-buying program. Such a softening of the already dovish monetary policy of the ECB will weaken the euro. Conversely, no action in regards to bonds will strengthen the EUR.
Pay special attention to ECB President Christine Lagarde’s press conference after the meeting. Lagarde will have to explain the bank’s stance on bonds, regardless of what action it takes during the meeting, but will also have to deal with announcements about the coronavirus pandemic, which appears to be threatening several eurozone countries at the moment.
Furthermore, since it is Thursday, it is time for the initial and continuing jobless claims reports from the United States. This data regarding the labor market is especially important considering yesterday’s disappointing inflation rate reports, which indicated prices are not increasing in the US quite as fast as expected.
Meanwhile, today the US Treasury will continue with the bond auction, this time with 30-year bonds, which should go well, considering the inflation data has helped calm down the bond situation on the market.
As for the stock market, today US stock indices are going to continue experiencing a massive rally thanks to the approval of Joe Biden’s $1.9 trillion stimulus bill. The proposal is done touring the chambers of Congress and received its final approval yesterday. Hundreds of billions of dollars are now expected to flow into the US economy as stimulus.
Thanks to the overall optimism currently dominating the financial markets, oil prices are on the rise today. The Brent crude climbed to $68.69, while the WTI reached $65.23 per barrel.
