2016-10-20 11:53:51

Following the rise in the American indices on Wednesday the European stock indices have grown as well.

Index Dow Jones has grown by 0.2%, S&Р500 by 0.2%, and Nasdaq has grown by almost 0.1%. Yesterday, European index EuroStoxx50 has increased by 0.28% with the closing price of 3054.0. Today the index EuroStoxx50 is traded at the yesterday's closing level. Movement in the index and in the pair Euro/USD shows sluggish activity of traders in advance of the interest rate decision by the ECB, which will be known today at 14:45 (GMT+3).

Since March 10, 2016, base interest rate in Eurozone has been kept at the level of 0.0%; refinancing rate for commercial banks (the interest rate at which commercial banks can place their funds on accounts at the ECB) is negative, at the level of -0.4%.

It is expected that the rates will be left at the previous level

However, market participants expect that Draghi will shed light on the information, which was recently announced in the mass media that the ECB could start to wind down QE program in the Eurozone.

If the ECB President Mario Draghi confirms possibility of the additional monetary policy easing and continuation of quantitative easing program, the pair EUR/USD will go down to the lows of July 25 at the level of 1.0955 and European stock indices will receive impetus for further growth.

If Draghi indicates possibility of the termination of the stimulus program, European stocks will decline, while the pair EUR/USD will rise above the level of 1.1045.

Recall that the ECB continues QE program in Eurozone, which means that the Bank monthly buys European assets for 80 billion euro (88 billion USD).

Press conference of the ECB, where Mario Draghi will give a speech, will start at 15:30.

Note that it happened before that after the interest rate decision by ECB and the press conference the price of Euro had changed by 3-5% in a short time. If Mario Draghi confirms probability of changes to the QE program, which is due to complete in March 2017, European indices, including the index EuroStoxx50 may change movement direction.

EuroStoxx50: investors are in anticipation of the interest rate decision by the ECB.  Fundamental analysis for 20/10/2016