EUR Higher as ECB Stands Pat, CAD Lower with Oil

Note  The table above is updated before publication with the latest consensus forecasts. However, the text charts are prepared ahead of time. Therefore there can be discrepancies between the forecasts given in the table above and in the text charts. 

Rates as of 0500 GMT

Market Recap

A fairly quiet day on Wall Street, with the SP 500 virtually unchanged but the NASDAQ climbing ever higher. 

The European Central Bank ECB followed the pattern of the Bank of Canada and Bank of Japan in downgrading current conditions but upgrading the outlook. ECB President Lagarde suggested that Q1 this year might show a decline in output, but was notably more positive about the mediumterm outlook. Looking ahead, the rollout of vaccines, which started in late December, allows for greater confidence in the resolution of the health crisisThe news about the prospects for the global economy, the agreement on future EUUK relations and the start of vaccination campaigns is encouraging Otherwise there was little of note from the meeting, as expected. 

There was so little change that analysts jumped on the fact that they took their comment that the Pandemic Emergency Purchase Program PEPP need not be used in full from the December press conference and added it to the initial statement following the meeting, which added a bit of emphasis to this small hawkish point. 

Admittedly, Lagarde seemed far more concerned about the exchange rate than I had expected. During the press conference, she…

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