What you need to know before markets open
- ECB's Draghi pulled the plug on the QE program yesterday, still, the EUR dropped more than 200 pips as the central bank head pushed out the first rate hike to end 2019.
- The Bank of Japan left the policy instruments unchanged as widely expected.
- German inflation is on the rise with the wholesale prices picking up strongly in May.
- The Eurozone inflation confirmed the preliminary estimate of near ECB’s target rate of 2% with Austrian central bank Governor Nowotny saying the ECB is fine with current inflation.
- The US consumer sentiment headlines the US session.
Friday's upcoming market moving events
- The US Empire State manufacturing index is expected to reach 19.0 in June, down from 20.1 in May.
- Canada’s manufacturing sales are expected to rise 0.6% m/m in April.
- The US industrial production is exp[ected to rise 0.2% in May.
- The US Michigan consumer confidence is set to rise to 98.5 in June.
Major market themes
- The EUR and GBP recovered slightly from 200 pips fallout against the US Dollar on Thursday on the end of the week profit-taking.
- The Euro recovered from mid 1.1500s to above 1.1600 after the ECB governing council member Nowotny said the Bank should seize possibility of monetary policy normalization soon as it is technically possible.
- Watch EUR/USD factoring in the US consumer confidence data. For details of how to trade US consumer confidence with EUR/USD read Yohay’s analysis.
Earlier in Asia/Europe
- The Bank of Japan left the monetary policy unchanged in June with one Monetary Policy Committee member dissenting the decision.
- German wholesale prices rose 0.8% m/m in May while increasing 2.9% y/y.
- The Eurozone inflation confirmed the preliminary estimate of 1.9% y/y increase while core inflation rose 1.1% y/y.
- ECB's governing council member Ewald Nowotny said inflation is in line with ECB target and the Bank is beginning policy normalization without setting off taper tantrum in markets.
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