The EURO railway only travels in one direction - downwards!
First things first:
📊🔮My crystal ball tells me:
EUR CPI (inflation data) today will be lower than consensus expected.
-> This will weigh on the euro in the long term
🔮An old saying goes:
"The crystal ball spoke and the ECB obeyed."
A look back.
🔮 - As predicted in July last year, inflation in the eurozone fell far faster than the market and the ECB in particular had expected
(In December, EUR CPI was already below the 3% mark)
🔮- The 2% target has almost been reached! (as predicted. Quote July 2023:""and reach the 2% target in the first half of 2020 at the latest.")
🔮 - As predicted, this led to the market pricing in upcoming ECB rate cuts far earlier than the ECB had planned
(Quote 23 November 2023: "I see a high probability that we will be very close to the ECB's first rate cut as early as April 2024.")
And here we are: in April 2024, very close to the ECB's first rate cut.
History has taken its course. And this should have come as little surprise to readers of this channel.
Although the probability of this is split 50/50 between April and June, this will no longer be decisive.
-> The fact is that the ECB will start with a first interest rate cut of 0.25% in June at the latest and many more will follow this year.
I expect 4-5 rate cuts by the ECB this year.
-> This goes against the market consensus which expects only 3 rate cuts from the ECB this year.
-> There is a lot of potential for the EUR train to move downwards!🟢
📊🔮My crystal ball tells me:
EUR CPI (inflation data) today will be lower than consensus expected.
-> This will weigh on the euro in the long term
🔮An old saying goes:
"The crystal ball spoke and the ECB obeyed."
A look back.
🔮 - As predicted in July last year, inflation in the eurozone fell far faster than the market and the ECB in particular had expected
(In December, EUR CPI was already below the 3% mark)
🔮- The 2% target has almost been reached! (as predicted. Quote July 2023:""and reach the 2% target in the first half of 2020 at the latest.")
🔮 - As predicted, this led to the market pricing in upcoming ECB rate cuts far earlier than the ECB had planned
(Quote 23 November 2023: "I see a high probability that we will be very close to the ECB's first rate cut as early as April 2024.")
And here we are: in April 2024, very close to the ECB's first rate cut.
History has taken its course. And this should have come as little surprise to readers of this channel.
Although the probability of this is split 50/50 between April and June, this will no longer be decisive.
-> The fact is that the ECB will start with a first interest rate cut of 0.25% in June at the latest and many more will follow this year.
I expect 4-5 rate cuts by the ECB this year.
-> This goes against the market consensus which expects only 3 rate cuts from the ECB this year.
-> There is a lot of potential for the EUR train to move downwards!🟢
-> The EUR subsequently saw weakness
-> EURNZD is (slowly) heading south again🟢
-> All conditions (for the ECB) to cut interest rates are met ✅️
🏛🇪🇺 Nevertheless, I expect the ECB (out of sheer stubbornness) to wait until June for the first rate cut.
-> If Lagarde hints at interest rate cuts for June AND July today, the beatings for the EUR will continue until morale improves💥💥💥