Any ideas on how to trade the ECB rate decision tommorow morning?

Discussion in 'Trading' started by tradingmonkey, Jul 2, 2008.

  1. ?
  2. Interest rate hike= long euro, perhaps long oil. If you can't trade futures, perhaps you may use ETFs.

    Short some european stock ETFs.

    Its effect in US stocks, will be mild and delayed, if that.
  3. Euro futures
  4. isnt this priced in? 57 of 58 est.s had 25 basis point raise.
  5. This is the play book for tomorrow:

    -ECB raises, employment numbers in line - Dow rallies 200pts
    -ECB keeps rates the same, employment numbers in line - Dow rallies 450pts
    -ECB raises, lose 100,000+ jobs - Dow falls 350pts
    -ECB keeps rates the same, lose 100,000+ jobs - Dow falls 150pts

    Anyone thinking employment numbers are going to look great needs to find a new career. Unless the numbers are manipulated by the government.
  6. Thats what im afraid of.
  7. Does the ECB include a statement like the Fed does? Since everyone knows they are raising rates, the only suprise could be a statement saying this is one and one or a statement saying additonal rate hikes will be necessary.

    Obviously, the first statement would ignite a rally in the dollar, while the 2nd statement would cause the dollar to take out all-time lows vs. the Euro.
  8. a crash is needed to slow world economic growth... so less oil is consumed.. and prices come down as supply is brought to bear on the market...

    so governments may want to crash world markets...

  9. Yes, they do include a statement. People are expecting a rate increase with hawkish commentary.
  10. I do think a bump is baked in the cake. I know all the talking heads are saying that, but the consensus is probably right.

    The jobs numbers is what's worrying me. Any significant deviation greater than the ADP numbers and anything is possible in this very unforgiving market.
    #10     Jul 2, 2008