Eyes on the Frankfurt prize -EUR trades in....>

FOREX: Eyes on the Frankfurt prize

-EUR trades in the middle of the week's range ahead of the ECB rate decision at

1245BST/0745ET and subsequent press conference 45 minutes later. Overnight

implied volatility suggests markets expect some large price swings in the pair

in the coming 24 hours, with the contract coming close to 18 vol points, the

highest print since the Fed rate decision in June 2018.

-Markets expect, at minimum, a 10bps deposit rate cut, an introduction of rate

tiering and a E30-40bln per month QE programme, although recent reports suggest

disharmony among the board, which could raise the risk the ECB under-deliver.

-Elsewhere, G10 FX is respecting recent ranges, with antipodean FX modestly

outperforming at the expense of JPY and GBP, although price action is muted and

volumes thin.

-JPY trades modestly weaker, although has recouped the bulk of the day's losses

(vs. USD) as markets eye reports the BoJ may see a need to keep a limit on 10y

yields at around -0.3%.

-Outside of the ECB decision, US CPI is due up alongside weekly jobless claims.