8:30am NY Time ECB Chairman Trichet Press Conference
ACTION: N/A
We’ll be focusing on the ECB (European Central Bank) Chairman Jean-Claude Trichet press conference today as he releases an official statement from ECB regarding the official Interest Decision, followed with a brief Q&A Session… Here is an overview of the situation
“Trichet usually delivers an official statement along with a Q&A session 45 minutes after the official rate decision at 8:30am. This press conference is usually very volatile and the market is always looking for clues from Trichet’s tone over future monetary policy directions. If Trichet is hawkish over the future of EURO, namely talking about exit strategey and possibility of rate hikes, then we will see EURO gaining across the board; however, if Trichet is dovish, focused on how slow the recovery might be and also on the issues over the imbalances of recovery within the members of EURO Zone, we’ll probably see EURO trade lower against other currencies… Furthermore, Trichet will never tell you what you want to hear… therefore you need to listen between the lines and keep an eye on the market for confirmation.
Fair Warning: If you have never traded this release, it is better to stay out of the market. Wait until around 9:30am~10:00am NY Equity open, then follow the trend. If Trichet is hawkish or being optimistic, then EUR/USD will gain throughout the session and may even carry over to Friday. Therefore there are plenty of opportunities to trade after the market has already established itself.
This Press Conference is usually done in 2 parts, the first part is a written statement which various newswire services will release headlines immediately at 8:30am, then Trichet will read through the statement; 2nd part of the press conference is a Question and Answer session where Trichet will take questions live from onsite media members. This part is highly unpredictable as Trichet may hint the market and drive prices intentionally. As I once heard from someone who knows Trichet personally, that there is never a slip-of-tongue with Trichet, he does everything intentionally.
However, Trichet is pretty good in maintaining a neutral stance, but sometimes market may read too much into his statements and move excessively… so once again, if you have not traded this release before, best to stay out.”
Trichet is likely to repeat recent rhetoric as the present remains similar to last rate decision. However, Trichet may address Greece’s situation which may cause some volatility in the Euro.
Here’s some recent comments made by ECB officials:
(GR) ECB‘s Trichet: Greece measures on budget are ‘convincing’; welcomed by the ECB
(EU) ECB: Have seen a rise in the level of risk to EMU and global economic risks – Considering lending banks covered bonds for collateral; ECB to discuss issue on March 4.
(EU) ECB‘s Gonzales Paramo: European crisis poses substantial policy challenges, record of Euro Zone governments has created a “credibility gap” in regards to fiscal policy
(EU) ECB‘s Stark: Risks of deflation still absent – Rejects idea to raise inflation target
(EU) ECB‘s Weber / SNB’s Hildebrand WSJ Op-Ed: Inflation targets need to stay low; IMF chief economist view on inflation may be misunderstood – Would be “dangerous” to add to inflation concerns in current economy
Quick scan over these comments shows that Greece’s problem might be at a wait and see phase; Inflation is not an issue; Recovery is taking place slowly.
Henry Liu
Related posts:
- ECB Trichet Press Conference 12/03/09
- ECB Trichet Press Conference 11/05/09
- ECB Trichet Press Conference 08/06/09
- ECB Trichet Press Conference 10/08/09
- ECB Trichet Press Conference 09/03/09
- Forex Analysis – Trichet Press Conference – 07/07/11
- ECB Trichet Press Conference 06/10/10 – Mininum Bid Rate Decision
- Detailed Analysis For ECB Trichet’s Interest Rate Press Conference
- ECB Minimum Bid Rate Decision 10/08/09
- ECB Minimum Bid Rate Decision 09/03/09
