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Next Thursday is the European Central Bank meeting. According to analysts from Rabobank, the ECB policy is largely set for the next year or so, and with the macro picture little changed, they don’t look for any big revelations from Draghi. They see a muted reaction in the currency market to the July meeting.

Key Quotes:  

“We expect a fairly muted market reaction to the July ECB meeting. With few fireworks expected from Draghi’s press conference and a largely unchanged policy statement, investors will have little to sink their teeth into this time around. The Q&A session may generate a few items of interest, but Draghi is well practiced at side-stepping whatever land mines may arise there.”

“Rates and FX may see some repricing at the margin, but we do not think we are likely to see anything that fundamentally changes the market’s expectations for ECB policy over the foreseeable future.”

“From a currency market perspective, we note that EURUSD remains firmly anchored within a fairly tight range spanning from 1.1510 to 1.1850. If our base case is correct, we do not expect anything to arise next week to challenge these boundaries. Draghi may indeed provide some clarity over what precisely the summer of 2019 means, but we struggle to think the FX market will get overly excited one way or the other. A (modest) knee-jerk reaction aside, we simply don’t think the hair-splitting between one meeting or another – still at least a year away -will matter immensely for a spot instrument.”