The ECB Minutes Preview: As investors await details of the future of the QE program today’s minutes of the June meeting may attract more attention than usual, as it is hoped to give an indication of how far advanced discussions on the future schedule are. Draghi’s press conference suggested not very far at the moment and he was very cautious even to commit to an exact timing for the announcement. And while there was some excitement over Draghi’s scheduled speech at Jackson Hole a report this week seemed to confirm that Draghi will stick to the script and not make major changes to what so far has been a very cautious approach to the next step for asset purchases. That monthly purchase volumes will be scaled back further is almost certain, but whether Draghi will already lay out a full tapering schedule, or like the last time around, sell this as additional stimulus, rather than the start of the phasing out of purchases will also depend on geopolitical developments and the progress in Brexit negotiations until then.
EURJPY has logged a four session low at 128.82, EURGBP struggles to hold 0.9100 and EURUSD sells off down to 1.1700, again and below the key 20 DMA at 1.1730. Option-related selling of euros is being noted in market chat today, which some sizable positions reportedly expiring at today’s New York cut, with strikes at various levels. The 1.1700 level is being singled out, as a breach would trigger option-related stop selling in spot.
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