ECB in focus for the day ahead

Today's news headlines:

‘ECB to firm up path to rate liftoff in July’. The European Central Bank will meet today, with markets expecting an announcement to end asset purchases, leaving the door open for interest rate hikes to come. Expectations are set for 25 basis-point rate hikes in July and September. Chief Economist at the ECB, Philip Lane, has emphasised that this is the most sensible pace to tighten policy. Recent growth downgrades by the OECD and the reality of elevated inflation could put stagflation fears back into focus. (Bloomberg)

‘Shanghai locks down parts of city again as virus fears return’. After a re-opening at the start of June, Shanghai is facing the possibility of slipping back into a lockdown. The Minhang district has been contained, and a further two-week shutdown will result if Coronavirus is detected. Greater curbs are being rolled out elsewhere throughout the city, requiring some to take daily tests. According to analysts, low vaccination rates in the population could keep China stuck in a lockdown cycle as the government insists on a zero-Covid policy. (Bloomberg)


Today

Asian markets moved lower overnight ahead of the European Central Bank meeting later today. European shares and US equity futures have followed suit. This morning, Brent crude is trading above $123 per barrel while the US 10-year yield holds above 3%. The Japanese Yen slide has paused after hitting a seven-year low against the Euro and a 20-year low versus the US Dollar.

Events

UK Royal Institution of Chartered Surveyors House Price Balance (May): 73% (est. 76%)
European Central Bank Monetary Policy meeting: 12:45PM
US Initial Jobless Claims: 1:30PM​​​​​​​

Interbank rates:
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GBP/USD – 1.2504
GBP/EUR – 1.1674
EUR/USD – 1.0710
USD/CAD – 1.2579

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