ECB's bi-annual Financial Stability Review will also be released today

Market movers today

• The most important release is euro area money supply and credit growth for April. At the ECB-forum in Sintra ECB-president Draghi in his speech Monday appeared concerned about banks’ capacity to increase loans. This suggests that the development in credit growth plays a more important role in an ECB easing decision and its design.

• ECB’s bi-annual Financial Stability Review will also be released today. It usually contains an evaluation of banks’ balance sheets and loan growth and could prove very interesting. In connection with the publication ECB vice-president Vitor Constancio will hold a press briefing at 15:00 CET.

• The German unemployment rate is expected to have continued to edge lower in May, although there are some signs that the German manufacturing engine has lost a bit of steam lately.

• In Norway retail sales for April will be released.

Selected market news

Market sentiment continues to be positive supported by better-than-expected US data yesterday and expectations of substantial easing from ECB next week. There has been no major market-moving news overnight. In the US S&P 500 yesterday closed at a new record high. Asian stock markets are also higher across the board, mainly taking their lead from the US stock market. Despite the positive sentiment in stock market US bond yields have edged slightly lower supported by dovish comments from FOMC member Dennis Lockhart (see below). In the FX market the major crosses have been largely range-trading overnight.

EU-leaders appear far from reaching a consensus on a new president for the European Commission. Jean-Claude Juncker has so far been a clear favourite but particularly the UK, Hungary and to some degree Sweden resist his nomination. After the EU-leaders met in Brussels yesterday German chancellor Angela Merkel - who has so far supported Juncker - appeared willing to consider alternative candidates and hence opened up the race.

Atlanta Fed President Dennis Lockhart in a speech overnight said that the Fed should be patient with raising interest rates and that he would be comfortable with inflation up to 2.5%. Specifically he said that in his opinion the Fed should not start to increase interest rates at least six months after it has ended its bond purchases, suggesting that the Fed could started raising interest rates at some stage in the second half of 2015. In addition, Lockhart repeated that the Fed’s preferred tools for raising interest rates would be reverse-repos and possible interest rate on excess reserves and that it should continue to reinvest in maturing bonds. Lockhart is not a voting member in 2014 but he will be a voter in 2015. Lockhart is considered relatively hawkish.