ECB: January Rate Cut “Done Deal” For ECB’s Kazimir
Slovakia’s ECB Governing Council member Kazimir believes that there will be another rate cut at the central bank’s January 30 meeting followed by another two or three back-to-back moves given the data. However, the high level of uncertainty means that the ECB will need to remain flexible. It began easing in June last year and has cut 100bp this cycle.
- Kazimir said that “Three or four cuts in a row are feasible, but at the same time, I must say that we cannot swear to it”. January “for me personally, the deal is done”, which is consistent with comments from other ECB members, according to Bloomberg.
- The OIS market has a 25bp cut for next week almost fully priced in.
- The ECB will have to continue to weigh up inflation risks, especially from the weaker euro and global developments, with persistent weak growth, especially in Germany. In this regard Kazimir said “what we need above all is balance between acting too cautiously and too aggressively”, but the central bank is on the “right track” to achieve its 2% inflation target. In December it forecast 2.1% for 2025.
- He said that the neutral rate is between 2% and 3%, but probably closer to 2%.
- Kazimir was concerned about the impact US President Trump’s policies will have on Europe’s competitiveness, which is already a problem.
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TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU WANTS GOVT TO PREPARE FOR NEW US ADMINISTRATION
- TRUDEAU DOESN'T ADDRESS QUESTIONS ABOUT HIS LEADERSHIP
USDCAD TECHS: A Pullback Would Be Considered Corrective
- RES 4: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 3: 1.4537 2.0% 10-dma envelope
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4356 @ 16:56 GMT Dec 20
- SUP 1: 1.4301 Low Dec 18
- SUP 2: 1.4174/4014 20- and 50-day EMA values
- SUP 3: 1.3928 Low Nov 25 and a key support
- SUP 4: 1.3822 Low Nov 6
USDCAD bulls remain in the driver’s seat. While price faded into the Thursday close, the recent breach of 1.4178, the Nov 26 high, confirmed a resumption of the uptrend and this maintains the price sequence of higher highs and higher lows. The latest rally opens 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4174, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Bearish Trend Structure
- RES 4: 0.6550 High Nov 25
- RES 3: 0.6501 50-day EMA
- RES 2: 0.6429 High Dec 12
- RES 1: 0.6337/6396 Low Dec 11 / 20-day EMA
- PRICE: 0.6263 @ 16:55 GMT Dec 20
- SUP 1: 0.6199 Low Dec 19
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
The trend needle in AUDUSD continues to point south and this week’s fresh cycle lows and Wednesday’s sell-off, reinforce a bear theme. The move down maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. The break lower opens 0.6158 next, a Fibonacci projection. Initial firm resistance to watch is 0.6396, the 20-day EMA.
