ECB Trichet Press Conference 06/10/10 – Mininum Bid Rate Decision

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 at 7:45am today, and after the prepared speech, he will have 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 some of the recent rhetoric, but clearly the situation in EU has worsened since last ECB rate meeting with sovereign debt crisis concerns hanging, Trichet will undoubtedly use this conference and try to ease some of those concerns…

The market will be looking to decipher Trichet’s speech, and it will pay close attention to any hints on a possible plan to contain the fear contagion that is currently spreading, that even France, the 2nd largest economy in Euro Zone,  is seeing a jump on it’s 10-year note from the lows of 2.84% to 3.06% just in May.

Here are some recent comments from ECB Officials, which may give you a preview as to what Trichet is likely to discuss during his press conference:

 * (EU) ECB‘s Weber: Interest rates may need to be raised faster over the medium term; German growth may come in closer to 1% than 2%.

Related posts:

1. ECB Trichet Press Conference 08/06/09
2. ECB Trichet Press Conference 11/05/09
3. ECB Trichet Press Conference 10/08/09
4. ECB Trichet Press Conference 12/03/09
5. ECB Trichet Press Conference 09/03/09
6. Forex Analysis – Trichet Press Conference – 07/07/11
7. Detailed Analysis For ECB Trichet’s Interest Rate Press Conference
8. Forex News Trading EU ECB Interest Rate Decision 05/05/11
9. ECB Minimum Bid Rate Decision 10/08/09
10. ECB Minimum Bid Rate Decision 09/03/09