Markets await Draghi's latest ECB meeting as governor

24 Oct 2019 12:07 PM

It seems that the negative risks still face the euro area, which was negatively affected by the slowdown in global growth and high uncertainty due to geopolitical developments, whether from the Brexit file and the escape of investors until the stability of the situation or from the trade war and the adoption of Trump protectionist policies, which will actually harm the euro zone, which depends on exports in the first place.
The latest disappointing data released this morning continued to shrink the manufacturing sector in the euro zone and in Germany, which is one of the most important sectors on which the economy depends. The sector continues to contract in the longest series of consecutive losses, putting the entire eurozone in a critical position and forcing the ECB to take further expansionary measures in the coming period.
In the evening, the eyes of the markets will be on the ECB's monetary policy meeting, the latest press conference by Mario Draghi as the bank's governor before he retires and the appointment of Christine Lagarde as governor in the coming years. The bank is expected to keep interest rates unchanged at zero and deposit rates at -0.50%, as it may be preferable to wait for the monetary easing program and inject liquidity into the market from November 1 before taking any further action. However, it will be difficult for Draghi to take new measures as his term expires and markets are cautiously awaiting Lagarde's intentions and policies, although we do not expect them to be different from Mario Draghi.
The euro fell on the back of negative manufacturing and service data to 1.1120 levels, and if Draghi's tone is negative today, the euro may continue falling once it breaks 1.11 to 1.10. It should be noted that 1.11 levels will be the key to determining the long-term trend of the EUR / USD.
Turning to the German DAX, which has already seen a strong rally once the symmetrical triangle pattern is breached over the four-hour time frame to retest 12920.00, our positive outlook remains valid once the previously mentioned level is breached to 13200.
Markets are awaiting the manufacturing, services and durable goods orders data which may affect the USD as the markets await the US interest rate decision at the end of next week, which is poised to cut interest rates again as disappointing data continues to be confirmed with the release of economic data today.
Turning to equity markets, Maircorsoft announced its third-quarter earnings, which exceeded expectations and supported the company's rise to $ 137.17 and makes our positive outlook towards $ 140. Earnings per share were $ 1.38 versus expectations of $ 1.24, while earnings were $ 33.1 billion versus expectations of $ 32.3 billion.
Finally, Tesla succeeded in recording profits despite the negative expectations and losses that may suffer from the company, where earnings per share rose $ 1.86 versus expectations at -0.42 dollars, but the long-term negative outlook remains based on the company with a decline in profits from 6.33 billion to $ 6.30.