The ECB kept its monetary policy and forward guidance unchanged

• European equity markets opened significantly weaker, but managed to erase some of the losses throughout dealings. US equity markets opened slightly stronger with gains of 0.1%‐0.2%

• The ECB kept its monetary policy and forward guidance unchanged. For the first time, the ECB said that while risks to the economic outlook remain tilted to the downside, they are moving closely to broadly balanced. The central bank didn't discuss changing its forward guidance or its future exit strategy.

• The US Congress began moving to extend Friday's budget deadline until May 5 and is expected to pass legislation allowing more time to finalize a spending deal to fund the federal government through September and avoid a shutdown.

• Growth in durable goods orders cooled more than expected in March (from 2.3% to 0.7%) as demand for computers, machinery and fabricated metal products slid. Weekly jobless claims increased more than forecast (to 257k), but remain near historically low levels. The trade deficit widened less than predicted (to ‐$64.8B).

• German inflation strengthened more than economists forecast in April, rebounding after an Easter‐holiday related dip the previous month. German CPI accelerated to 2% Y/Y from 1.5% Y/Y the previous month, exceeding the 1.9% Y/Y forecast and hitting the ECB's inflation target.

• Economic confidence in the eurozone surpassed its pre‐debt crisis peak and hit the highest level since September 2007 as the bloc's growth prospects have been lifted by buoyant consumers and a brightening global outlook. The EC's April economic sentiment gauge rose from 108 to 109.6 in April, ahead of forecasts (108.2).

• In a surprise move, Sweden's central bank extended its bond buying programme and slightly delayed future rate hikes despite strong domestic growth and cautious optimism about global economy activity. EUR/SEK rose from 9.55 to 9.65.

• In her toughest message so far on Brexit, Ms Merkel pledged the EU would put its interests first and manage the negotiations in its chosen way. This involves dealing first with the exit bill, in defiance of Britain's demands for the financial issues to be handled at the same time as talks on a new relationship. The order was "not reversible".

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