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Market Recap – Draghi’s response to dragging economy

Thursday, June 6, 2019 10:39 AM GMT

Today is the day of the monetary meeting of the ECB. Mario Draghi, the “whatever it takes” Governor of the ECB, the one that will step down on October having made no rate hike during his terms, is set to continue delivering dovish communication. Latest European inflation readings reveal that, despite the decreasing unemployment and the wage growth, there is no inflationary pressure (i.e there are more reasons to be accommodative than restrictive). EU’s manufacturing has been shrinking for 4 consequative months, retail sales and EU’s trade balance are decreasing. The only promising readings are the M3 and the loans increase.

Yesterday, Equities maintained their Monday’s gains. On the other hand, USD rebounded pushing EUR, GBP, AUD, CAD lower.

The 75th anniversary celebrations of the D-Day landings continue in Northern France with the attendance of Word Leaders.

Today in the Peterborough UK by-elections, there is a close race between the candidate of the Nigel Farage’s Brexit party and the Labor candidate.

Meanwhile, the St. Petersburg International Economic Forum, the equivalent Davos forum of Russia, is under way.

Finally, no progress has been made between the US and Mexican negotiators ahead of June 10, the day when tariffs increases are set to kick in, according to President Trump’s announcement.

Macro releases: Besides the ECB meeting, the focus will be on EU’s GDP q/q, US unit labor cost and unemployment, Japanese cash earnings and household spending.

 

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