Dow to open higher. Global stocks in the green. Here’s what caused the optimism

Global stocks are higher on Tuesday, after European Central Bank President Mario Draghi hinted there could be more monetary easing in the eurozone to boost the economy.

Eurozone growth has been lagging for a while now, but having a stimulus commitment of the ECB is taking the edge off recession risk.

US stock futures are pointing at a stronger open. Futures of the Dow are up 0.6%, while those for the S&P 500 and the Nasdaq Composite are up 0.6% and 1.1%, respectively. European stocks also traded in the green.

The euro, on the other hand, isn’t taking the news so well and is down 0.2%, buying $1.1189. Currencies tend to strengthen in a higher interest rate environment. This was one of the key drivers behind US dollar strength last year.

President Donald Trump tweeted about the euro move, saying the dip in the euro was making it unfairly easier for European exports to compete with US exports.

“This week is supposed to be all about the Fed, but before Chairman Powell will have the opportunity to deliver a dovish message on Wednesday evening, ECB President Draghi has moved the markets by signaling that the eurozone could soon see a fresh dose of monetary policy stimulus,” said Jane Foley, senior FX strategist at Rabobank, in a note.

The Federal Reserve is kicking off its two-day meeting today, before it culminates in the monetary policy update and press conference tomorrow. With expectations for an interest rate cut in July at 88%, up from 86% yesterday, according to the CME FedWatch tool, investors will be watching Fed Chairman Jerome Powell’s language when he talks about future policy strategy.

Market participants expect him to be careful with his wording, but that the word “patient” — which he introduced at the beginning of the year to describe the central bank’s approach to future policy decisions — will disappear.