Very ‘dovish’ remarks from European Central Bank chief Mario Draghi pushed Euro sharply lower.

Very ‘dovish’ remarks from European Central Bank chief Mario Draghi pushed energy futures higher, but a stronger Dollar dulled traders’ appetite for base metals, according to traders.

Speaking at the annual ECB Forum in Sintra, Portugal, Draghi said that if the economic outlook failed to improve then “additional stimulus would be required”, adding that “considerable” room remained to expand quantitative easing in the euro area.

His remarks pushed the main stock market gauges out of an early rut and stoked a rally in euro area government bond markets.

The focus on Wednesday will be squarely on the US central bank with investors looking for validation of their expectations for up to three interest rate cuts over the remainder of 2019.

Policymakers on the Federal Open Market Committee are widely-expected to keep the target range for the Fed funds rate at between 2.25-2.50%, but according to some analysts there is room for disappointment given that financial markets have already priced-in two 25 basis point rate cuts by the end of 2019 and even odds of a third.

Sterling was slightly higher on Tuesday, as voting got under way in the second round of voting to choose the next Tory leader and European Central Bank chief Mario Draghi said rate-setters in the Eurozone were not resigned to simply accepting low inflation.

Against that backdrop, Sterling gained against the Euro to settle around 1.1209, although versus the Dollar it was barely changed at 1.25499.

Euro/Dollar meanwhile was down to 1.11944, even following reports that in February the White House had looked at the practicalities of demoting Federal Reserve chairman Jerome Powell.

Economic Calendar

07:00EUR German PPI (Y/Y)(MAY)2.10%2.50%
07:00EUR German PPI (M/M)(MAY)0.20%0.50%
09:30GBP Core CPI (Y/Y)(MAY)1.90%1.80%
09:30GBP PPI Core Output (Y/Y)(MAY)2.22.2
09:30GBP CPI (Y/Y)(MAY)2.20%2.10%
09:30GBP CPI (M/M)(MAY)0.70%0.60%
09:30GBP PPI Input (Y/Y)(MAY)4.50%3.80%
09:30GBP PPI Input (M/M)(MAY)1.30%1.10%
09:30GBP PPI Output (Y/Y)(MAY)2.30%2.10%
11:00GBP CBI Industrial Trends Orders (JUN)-12-10
12:00BoE QE Purchase Target(M/M)(JUN)435B435B
12:00USD MBA Mortgage Applications-26.80%
13:30Bank of Canada Core CPI (Y/Y)(MAY)-1.50%
13:30Bank of Canada Core CPI (M/M)(MAY)-0.30%
13:30CAD CPI (M/M)(MAY)0.40%0.40%
13:30CAD CPI (Y/Y)(MAY)2.00%2.00%
13:30ECB Benoit Coeure Speaks--
15:00ECB President Mario Draghi's Speech--
15:30USD Crude Oil Inventories-2.033M2.206M
19:00USD FOMC Statement--
19:30FOMC Press Conference--
23:45NZD GDP (Q/Q)0.60%0.60%
23:45NZD GDP (Y/Y)2.50%2.30%

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.