market turbulence witnessed on Tuesday in which the pair fell over 100 pips on a sudden surge in USD strength. Whilst the general consensus is the move was driven by safe-haven flows due to US recession and banking fears, it’s also possible it was helped by hedge funds racing to cover a massive $10B failed US Treasury bond short.
That said, US T-bond yields, especially of a two-year maturity, plummeted dramatically, as investors reassessed the possibility the Federal Reserve might start cutting rates sooner than had been expected. Pierre Wunsch, president of Belgium’s Banque Nationale, ECB President Christine Lagarde recently said there is still “some way to go” before Frankfurt is done with hiking interest rates.
For the sake of clarity, a ‘decisive break’ might be a ‘breakout candle’ – a long green bullish daily candle that extends above the 1.1075 highs and closes near its high, or three smaller bullish green candles in a row that break above the highs. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.Eurozone inflation data, measured by the Harmonized Index of Consumer Prices , is an important econometric for the Euro.