Market movers today
Today is a very quiet day in terms of data releases. We get the rate decision from the Central Bank of Russia, where we expect a cut to 9.00% from 9.25%.
In the US, we get the preliminary consumer confidence print from University of Michigan in June, which economists expect to remain unchanged around 97.1. Also building permits and housing starts data are due today.
Fed’s Kapaln is due to speak t onight .
We also get the final HICP inflat ion data for the euro area in May.
The oil market will monitor the release of the weekly US oil rig count tonight for signs of a negat ive supply response to the fall in the oil price.
Selected market news
Bank of Japan (BoJ) kept its policy unchanged at its meet ing this morning. Hence, keeping the key policy unchanged at minus 0.1%, its target for the yield on 10Y JGB unchanged at 0 and asset purchases unchanged at previous levels. BoJ maintains the view that the Japanese economy is turning towards a moderate expansion. It has revised its view on global growth and consumpt ion upwards and signals in general its confidence that the recovery has been gaining moment um. ‘Private consumpt ion has increased resilience against a background of steady improvement in the employment and income situation’, is the current wording, which is more upbeat than the wording in April when consumpt ion was ‘just ‘ resilient . Now the focus turns to the press conference where the market is likely to be looking for hints about how the cent ral bank eventually plans to exit its st imulus. USD/JPY is trading around 1.11 and little affected by the outcome.
The negative sent iment plaguing financial markets after the hawkish FOMC meet ing on Wednesday eased overnight with Asian stocks up around 0.5% and European and US equity futures posting small gains. Commodity markets are also trading with a slight ly more positive tone, e.g. the price on LME copper is up 0.3% t oday. The USD is holding on to recent gains.
Greece has reached a deal with internat ional creditors on its bailout package paving the way for the count ry to repay EUR7bn in debt that expires next month.
In the UK pieces are starting to fall into place after last week’s elect ion. Yesterday, it was reported that a deal between the Conservat ives and the DUP is expected to be finalised and announced next week paving the way for the Conservat ive government to cont inue. Furthermore, UK and EU Brexit negot iators Davis and Barnier announced that talks will start on Monday.
