The EURUSD market suggests investors' expectations for a possible US recession in 2020. The gap between EURUSD contracts for 2019 and 2020 fell below 0, indicating that traders that are short on the pair are beginning to assess the likelihood of an end to tightening monetary policy by the Federal Reserve in the United States.
This drop actually shows that traders deduct from their previous assessment a planned increase in interest rates in the United States. This suggests, and perhaps ending, the tightening of monetary policy in 2019.
However, the short-term moods of the couple remain negative, not forgetting today's ECB monetary policy meeting and Mario Draghi's press conference.
Source: Bloomberg Finance L.P.
Charts: Used with permission from Bloomberg Finance L.P.
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