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This week’s main event happens within hours and yet nothing remains a forgone conclusion. Traders have the added difficulty of seeing the currencies in focus, the EUR and GBP, actually move to overnight session highs before either's central bank delivers their rate decision. Spanish debt results and some stronger Chinese data have made “deliberate” position taking just that much more expensive before Draghi takes to the airwaves.

The Spanish Treasury happened to sell +EUR5.8b in bonds this morning, well above its target range of +EUR4-5b. Just like in Ireland earlier this week, borrowing costs have come down at their first debt auction of the year. Let’s hope this is a positive omen for these periphery struggling economies. Demand was strong and higher than the previous auction, with the bond +2.6 times subscribed compared to +1.6 times three months ago.

China is bathing in the afterglow. The country continues to aid investor risk early this morning after more strong data was released from that region last night. It’s currently supporting rallies in stocks, the AUD, and emerging Asia FX. It could be described as providing more icing for risk appetite. Chinese total social financing rose to +¥1.63t last month versus expectations for +¥1.2t. Trumping that was Chinese exports rising +14.1%, y/y, doubling and then some the single digit expectations for growth of +5%. This has resulted in a trade surplus rising to +$31.62b last month, compared with +$19.6b surplus in November.

As described earlier, the main event is the ECB meet in a few hours. What is important is not how the regional economy is doing in absolute terms, but relative to what the ECB expects. For some CB watchers it’s just about “showing them the rate”. Last month many board members wanted to cut rates, recent data and market stability have certainly diluted "that" possible sense of urgency. Periphery yields continue to fall, while the premium over "bunds" has narrowed. This weeks periphery debt sales have been a shining example of that, allowing many to expect the ECB to leave rates on hold.

In this scenario, Draghi’s press conference becomes more important, with everyone hanging on his last word. Maybe his “tone” will be more hawkish than people think? President Draghi is likely to continue to emphasize risks to growth and his willingness to ease. This occurring could probably leave the EUR vulnerable to further recovery this morning as overall rate differentials will have not changed. Obviously, market positioning, specifically short the "single" currency will have investors looking northwards as being the most vulnerable side. Currently day trend indicators have lifted from oversold territory but lack signals for a decent pickup. Pullbacks have been limited. Many now wait on Draghi’s press conference to give traders the “required” light for direction.

However, the “Old Lady” is up first and the sense of excitement around her decisions this morning is tedious and boring in comparison to her allies across the English Channel. What has Governor Carney got himself into? The market does not expect the Bank of England to deliver any policy innovation at today’s meeting. As many analysts note, the improvement in the U.K.’s cyclical data and their rising inflationary risks have significantly reduced the likelihood of further easing in the near term. FI traders are looking beyond Carney’s arrival before the first rate change to occur.

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