EUROPEAN SESSION
In the final part of the European session, we have the ECB rate decision. The central bank is expected to keep interest rates unchanged while reiterating that it remains well positioned to navigate the uncertainty caused by the war and that it will continue to follow a data-dependent and meeting-by-meeting approach.
We don’t get macroeconomic projections at this meeting, so the focus will be entirely on President Lagarde’s press conference. The market is pricing in a total of 47 bps of tightening by year-end (roughly two rate hikes) and a 73% chance of an increase at the next meeting in September. Given this backdrop, it’s going to be hard for Lagarde to out-hawk the market.
AMERICAN SESSION
In the American session, we get the US Jobless Claims data. Initial Claims are expected at 212K vs 208K prior, while Continuing Claims are seen at 1807K vs 1805K prior. The US jobs data continues to point to a resilient labour market and it’s not a source of worry for the Fed.
Despite having the ECB and Jobless Claims today, it’s worth reminding that the market focus remains on the US-Iran conflict.
This article was written by Giuseppe Dellamotta at investinglive.com.
