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de Coz Echoes Lagarde
On the back of the hawkish sentiment expressed by ECB president Christine Lagarde on Sunday, we heard an interesting comment from ECB’s de Coz yesterday, head of the Bank of Spain. De Coz who is well known as being one of the more dovish ECB members, was seen voicing his support for continued ECB hiking this year. Citing a need to drive inflation down to target as quickly as possible, de Coz called not only for further rate hikes this year but also for rates to be kept at higher levels for longer in order to tame elevated inflation.
Hawkish Expectations Building
The ECB has hiked rates three times this year, two set of .5% hikes and a follow up .25% hike last month. At the last meeting, however, the bank was seen removing its commitment to nay further tightening which many interpreted as a sign that the bank would look to pause rates from June. However, recent commentary has been decidedly hawkish, stocking ECB tightening expectations once again.
PMIs Weaken
Despite these hawkish comments, EUR is falling today on the back of a slew of weaker-than-forecast PMI readings. French and German services PMIs were seen undershooting forecasts while the eurozone manufacturing PMI was seen plunging deeper into negative territory at 44.6 down from 45.8 prior.
Technical Views
EURUSD
The correction lower from the highs around 1.11 has seen the market trading back down to test the bull channel lows and structural support at the 1.0785 level. This is a key area for the market with a break here marking a firmly bearish technical development. Below here, 1.0676 is the next support to note.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.