This past week we saw some big move developments and was a very busy week for the markets and the euro pairs generating the most interest. The past week risk events have been also generating some volatility which over the past weeks was hitting new lows.

First we have ECB which as expected has delivered and backed up Mario Draghi's words. Although ECB has introduced more easing than expected EUR/USD reaction took many by surprise. But this only add to the case that the market does not trade merely off economic data, but on positioning alone as well. If you check out my blog post from 2 days ago you can see that I was expecting something like "buy the rumor, sell the news" as the market is skewed in one direction usually we go the other side.

So here is the full ECB "package", as follow :
  1. Deposit Rate to -0.1%;
  2. The ECB’s benchmark rate was cut by 10 basis points to 0.15%
  3. TLTROs will be carried out in September and December.
  4. ABS Plan:"From March 2015 to June 2016, on a quarterly basis, banks will be able to borrow as much as three times the amount of their net lending to euro-area companies, above a threshold set by the ECB."
  5. 2014 inflation was lowered to 0.7% from 1.0% and 2015 inflation to 1.1% from 1.3%.
  6. "ECB would suspend its weekly securities market program (SMP) sterilization, which frees up €165 billion in liquidity."
  7. ECB leaves the door open for QE.

The other major risk event of the week was definitely the US NFP figures which came slightly below expectation at 217K which although is below last figures of 288K we're above the prior two month average of just under 200K. Unemployment rate came in steady at 6.3%, the lowest since September 2008. Overall this figures just shows that the labor market is healing at a slow peace, however still good.

Another big mover off the week was NZD/USD which I already recommended to stay bullish and buy the dip as I'm expecting in few months time for new all time highs exchange rate, you can find my full report on RBNZ and NZD/USD here: RBNZ The most Hawkish CB

Best regards,
Daytrader21
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