While the market was expecting something from the ECB, some combination of a possible new TLTRO (maybe that could come later), a possible change in rates forward guidance, and some revision to growth and inflation forecasts, it served up all three with gusto. The read through from markets has been a defensive one with European stocks down for the session (banks by more), as it is in the US. Bond yields fell with the DXY higher and the AUD lower testing 0.70. The German 10y bund dropped a cool 6.1bps to just 0.067%, US 10y Treasuries are 5 bps lower too, while the DXY is higher from a combination of Euro weakness, some volatility in the Pound ahead of some key parliamentary votes in the UK next week and a defensive reactionary stance in AUD and NZD trading.

To mark my 1800th issue of TraderNoble Daily Commentary I am offering a special 2 year rate of Euro 2750 for my Platinum Service which includes 1 to 4 updated emails throughout the trading day To demonstrate this value, a monthly subscription over the same period would cost 4440 euro in total This offer represents a 38% discount and is open to both new and existing members. If anyone is interested in this offer can you please email me on bryan@tradernoblecom for details

For anyone following my Platinum Service it made 227 points yesterday and is now ahead by 33 points for March, having made 1013 points in February, 1671 points in January, 2803 points in December, 1541 points in November and 2094 points in October. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 1600 points

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ECB Adjusts Policy After Slashing The Growth Outlook 

While a lot of recent focus has been on the Fed and its move now to sit on their policy hands (more on that below from Lael Brainard , it has been a refocus on the impact of the trade wars, Brexit and likely an undercurrent of concern about the domestic Euro-Zone economy that has seen the ECB slash its growth outlook.

Last December, the ECB was forecasting growth of 1.9% for 2019, but it has slashed that to just 1.1%, the same growth that was evident at the end of last year when the economy grew a meagre 0.2%/1.1%, (also confirmed yesterday with year to growth revised from 1.2%. The growth trajectory then does not move back to its previous forecast until 2021 at 1.5% after a now expected 1.6% for 2020.

Inflation is now expected to be just 1.2% this year (down from 1.6%), the forecast for next year and the year after cut 0.2% points to 1.5% and 1.6% respectively. And so that is still not back to the around 2% target of the central bank. Not surprising then that the ECB sees downside rise to the outlook and not a balanced outlook even though in his press conference, ECB President Draghi thought that there was a good chance the trade wars and Brexit growth bugbears would be settled. Are they then worried also about the internals of the Euro Zone economy?

Draghi admitted that policy options for the ECB were limited and that some economic forces (external factors such as trade protectionism and Brexit) were outside of its control. The extent of the forecast revisions had the market even more worried about the state of the economy, consensus forecasts currently pegged at 1.4% for 2019.

The policy response to this grimmer outlook came in two parts. First, the ECB announced a new two year bank funding package (Term Long Term Refinancing Operations, this one TLTRO3) to start on September 2019. Second, the forward guidance on when the ECB might begin on the path from negative interest rates was changed from the ‘’after the summer of this year’’ to ‘’at least until 2020’’. The fresh batch of cheap long-term (2-year) loans for banks to be launched in September will overlay the previous batch of long-term loans that mature in June 2020, that from June this year will have less than 1-year to mature. By promising a new batch of loans, the ECB wards off what would have been a tightening in liquidity conditions later in the year.

There is going to have to be a swift and compelling turnaround in Euro-Zone activity in the second half of this year before the ECB will even consider beginning on that higher rates path. Some ECB members wanted to push out the forward guidance further (March); others worried about the longer term effects of negative interest rates.


Market reaction saw some rally in European stocks to the main headlines from the ECB, but then did an about turn after Draghi’s press conference. The Eurostoxx 600 index has closed down 0.4% and the E600 Bank index by a larger 1.88%. It was also a bad session for US Equities with the main Indices all closing 1% lower.


For the Euro, it has been a sharp step down, the single currency down by over 1% since yesterday morning, losing more than a big figure from over 1.13 before the ECB to below 1.12 in early trade this morning, also dragging risk currencies lower as US stocks closed down by over 1%. Sterling also got hit hard with Cable closing below 1.31.

Brainard Adds To The Dovish Sentiment 

Speaking on the economy and monetary policy, the thoughtful Fed Governor Lael Brainard spoke of tame inflation as giving the economy room to run (in other words, don’t rush to hike if growth rebounds), risks to the economy favouring a softer Fed path (looks like she has revised down her rate projections), and that navigating cautiously is the right path. Add into that the point from the influential John Williams that the Fed is now at neutral and it is not surprising the market pared back Fed rate expectations further. The 2y Treasury yield eased a sizeable 4.68bps.

Brexit Dates Nigh 

Bloomberg initially reported that European and UK officials were pessimistic about the chances of a breakthrough in Brexit talks, with Britain accusing the bloc of intransigence and European negotiators worried that whatever they offer won’t be enough to get Parliament behind PM May’s deal. It seems that the most likely scenario from here is that May’s deal is defeated next week (12 March) and then Parliament takes control of the process, which will likely include a vote to reject a ‘’no-deal’’ and then a vote to extend the exit day to allow negotiations to continue.

However, it is still a moving feast and as I go to press, Bloomberg has reported that the EU is said to make a new offer to the UK on the Irish backstop issue, bolstering the review system that aims to track progress towards getting rid of the backstop. The EU awaits a response from the UK.

This morning on the Economic Front we already had the release of German Factory Orders which printed at -2.6% versus +0.5% expected. No wonder Dragi is worried about the Euro-Zone Economy. At 9.30 am we have UK Consumer Inflation Expectations. At 1.30 pm we have US Non-Farm Payrolls with a step down in payrolls growth from 304K to 180K expected, Unemployment at 3.9% after 4.0% last month and Average Hourly Earnings up to 0.3%/3.3% from 0.1%/3.2%. Also at 1.30 pm we have Building Permits. Finally the ECB’s Mersch speaks at 4.30 pm.

March S&P 500

The S&P has now fallen over 80 Handles since last Monday afternoon with the market closing below its key 200 Day Moving Average after a late sell-off into the close. With so many of my positions hitting at the same time yesterday including the S&P which traded the whole of my buy range for an average long position at 2748, I covered this position too early at my 2750 T/P level and I am now flat. Thankfully for anyone who was long the S&P did rally to a rebound high of 2760 before the late sell-off. Just as the Dow needs to hold the key 25200 support level the S&P needs to hold the 2700/2720 area or else all the good work done by the markets since the Christmas Eve low could unravel. Today I will continue to be a buyer on any dip lower to 2716/2732 with a wider 2705 stop. Despite the blood bath this week I still do not want to e short the S&P at this time. The main reason for this is once the US and China agree a Trade Deal then we will spike higher.


The Euro fell to its lowest level in nearly 2 years at 1.1181 after Dragi’s incredibly negative press conference. I bought the Euro at 1.1245 before adding to this position late in the New York session at 1.1200 for a now average long position at 1.1223. As I mentioned yesterday a close below 1.12 for a couple of days opens up the possibility of a move lower to at least the 1.06/1.08 area over the coming weeks. We are now at a critical juncture. I will now lower my T/P level on this position to 1.1240 with the same 1.1165 stop. If any of the above levels are hit I will be back with a new update for my Platinum Members.

March Dollar Index

The Dollar soared yesterday with the market trading the whole of my sell range for a now average short position of 97.40. I am still short and as I am long the Euro I will now raise my T/P level on position to 97.30. I will also lower my stop to 97.95.

March DAX

My DAX plan worked well with the market trading lower to my 11450 buy level before rallying to my 11495 T/P level and I am now flat. Today I will again look to buy the DAX on any move lower to 11300/11360 with a 11245 stop. I still do not want to be short the DAX at this time.

March FTSE

In the last few minutes the FTSE has finally traded lower to my 7100 buy level. I will now raise my stop on this position to 7065 while lowering my T/P level to 7115 as I want to be flat ahead of the US NFP data at 1.30 pm.

Dow Rolling Contract

The Dow has traded in a 350 point range since I posted yesterday morning. Thankfully the Dow rallied to an initial high of 25700 which should have given anyone who was long a decent gain. This move higher enabled me to cover my 25570 long position at my 25630 T/P level. Subsequently I emailed my Platinum Members to re-buy the Dow at a price of 25360 with a 25430 T/P level which were both filled and I am now flat. Today I will again look to buy the Dow on any move lower to 25180/25310 with a 25090 stop which is just below the 200 Day Moving Average which comes in at 25126. Remember a break and close below 25200 is bearish.


Shortly after I posted the NASDAQ rallied to my 7100 T/P level on my 7085 long position. Subsequently the market sold off to my second buy level at 7030 before rallying to my revised 7047 T/P level and I am now flat. The NASDAQ has strong support from 6900/6960 and today I will be a buyer on any dip to this area with a 6855 tight stop.

March BUND

The Bund is sol close to having a negative yield which is scary and just shows you how weak the Euro-Zone Economy is. Unfortunately the Bund just missed my 163.25 buy level with a 163.40 low print before rallying to trade at 164.70 this morning. The Bund has strong resistance from 165.10/165.50 and today I will be a seller in this area with a 165.85 stop.

Gold Rolling Contract

Gold again just missed my second buy level at 1279. I am still long at 1296 with the same 1297 T/P level. If this happens I will be back with a new update for my Platinum Members.

Silver Rolling Contract

Silver made a low of 14.96 yesterday just shy of my 14.95 buy level and I am still flat. Today I will raise my buy level to 14.70/15.00 with a higher 14.35 stop.