EUR/USD is unchanged in the Friday session. Currently, the pair is trading at 1.1933, up 0.15% on the day. In economic news, it’s a quiet end to the week, with no German or eurozone events. ECB President Mario Draghi will speak at an event in Florence and the US releases UoM Consumer Sentiment, which is expected to improve to 98.4 points.
The ECB continues to send a message of cautious optimism to the markets, and this was underscored by the release of the ECB Economic Bulletin on Thursday. The report stated that the eurozone economy continues to show “solid and broad-based expansion” but did acknowledge that growth in the first quarter slowed. As for inflation, policymakers remain confident that inflation will continue to move towards the inflation target of 2 percent. However, inflation remains subdued and has not shown signs of an upward trend. The report reaffirmed that the ECB plans to maintain interest rates at current levels for an “extended period of time, and well past the horizon of the net asset purchases.”
In the US, Thursday indicators were a mixed bag. Unemployment claims impressed, remaining unchanged at 211 thousand. This easily beat the estimate of 219 thousand. The US labor market is at near or full employment, which has resulted in a slowdown in job growth due to a shortage of skilled labors. Earlier in the week, JOLTS Job Openings climbed to a record 6.6 million. At the same time, inflation levels remain low, as the Federal Reserve target of 2 percent remains elusive. CPI rebounded with a gain of 0.2%, but this fell short of the estimate of 0.3%. Core CPI edged lower to 0.1%, shy of the forecast of 0.2%. Inflation levels will be an important factor for the Fed in its monetary policy projection, which remains at two more hikes in 2018. According to the CME Group, the odds that the Fed will press the rate trigger at the June meeting stand at 100%.
