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Today is ECB DAY as the latest “Most Important ECB Meeting Ever” has pulled global markets into relative paralysis ahead of the decision. The European Central Bank left rates unchanged at 0.05%, which was widely expected, but all eyes were on Chairman Draghi’s 830am statement and press conference. Mr. Draghi took the decision once again, to really make no decision. The committee has decided to put off any new policy tools until the first quarter of 2015, waiting instead to see how the economy reacts to what little they have done thus far. After making a sharp move lower, EURUSD has jumped higher in very thin, seesaw trading. While Mr. Draghi stated the ECB has lowered its inflation outlook for next year, he declared that the committee believes lower energy prices (please see oil) could add more disposable income to Europeans’ pockets, aiding the local economy.

European equities are poised to end today’s session a sea of red. Obviously disappointed in Mr. Draghi’s statement, stocks turned negative shortly after he took to the podium. Elsewhere in Europe, the (once) Great British Pound was largely unchanged following the latest MPC meeting, as rates and QE remained steady at 0.50% and £375B, respectively. The pound has been one of the few winners this week not named the US dollar. As the euro has seen more selling before the ECB meeting, one of the beneficiaries has been the pound, as EUR/GBP tested trend line support at .7850.

The Asian session was quiet for the most part, with AUD and JPY the only movers. USD/JPY pushed to a fresh high close to the psychologically important 120 level as the Nikkei Index hit seven year highs. The Australian dollar received a mild bump following better than expected retail sales and trade balance. Unfortunately, the move higher was limited as the market dwells on yesterday’s poor GDP numbers as calls for interest rate cuts become more prevalent in the Australian media. Looking beyond today’s ECB rate meeting, all eyes are turning toward tomorrow’s US non-farm payrolls report.

Turning briefly to yesterday’s Bank of Canada policy statement, Chairman Poloz took a mildly bullish turn as rates were held at 1.0%. The central bank said the country’s economic positives largely outweigh the negatives, specifically pointing to an increase in exports thanks to a depressed currency and improved US economy. More business investment has led to more jobs and for now, the BoC is comfortable with rates at current levels. The USD/CAD rate moved down about 0.50% off of 2014 highs as a result, but is not giving up any substantial gains for the moment. In the US, weekly jobless claims were right in line as 297k new Americans claimed unemployment benefits for the last week.Tomorrow, we will get the latest monthly jobs report from the greatest country in the world. The US has consistently added 200,000 new jobs each month going back to February of 2014. Revisions each month have also been stronger and as US GDP remains firm around the 3% level, global markets will be looking for another strong print, potentially boosted by seasonal retail additions. The US dollar will be firmly in focus ahead of the weekend with the ECB behind us yet again. With the end of the year just over three weeks away, what you see may be what you get in the FX space as desks empty ahead of the holidays and liquidity dries up.

Further reading:

CAD Post-BoC: It’s Not Just An Oil Story – Credit Agricole

USD/JPY > 120 onwards and upwards