Attention Turns to ECB Meeting Tomorrow.
The European Central Bank is very likely to end its asset purchasing programme this week, paving the way for a rate hike in July. With the ECB meeting tomorrow, there is increased feeling that the ECB will not hike rates tomorrow but look to hike over the next 2 months. Inflation in Hungary exceeded 10% for the first time in more than 20 years, adding further pressure on the ECB tighten monetary policy further.
There is GDP data for Europe out today with quarter-on-quarter and year-on-year data expected to stay the same with data across Europe light in the coming days.
Following Boris Johnson’s no confidence vote, pressure has mounted from his MPs to cut taxes. The prime minister’s supporters believe the move would help rebuild unity in the Conservative Party and help people cope with the rising cost of living. But ex-cabinet minister David Davis accused Mr Johnson of “letting things slide” and warned him to “get his act together” quickly or leave office.
The annual pace of house price increases in Britain slowed in May for a third month in a row and a further cooling of demand is likely as households struggle with high inflation, mortgage lender Halifax said on Wednesday. Prices rose by 10.5% compared with May last year, down from April’s 10.8% increase to show the smallest increase since January. Prices rose in monthly terms for an 11th consecutive month, up by 1.0% in May after a 1.2% increase in April. Bank of England data published last week showed a sharp drop in mortgage approvals in April.
The World Bank on Tuesday said the world is entering “a protracted period of feeble growth and elevated inflation,” as it cut global growth forecasts by 1.2 percent to 2.9% for 2022. It had predicted growth of 4.1% in January. The bank added that many countries are likely to face recession. The bank blames the COVID-19 pandemic for most of the problem and said the Russian invasion of Ukraine is also a factor.
U.S. Treasury yields climbed early on Wednesday morning as investors await a key inflation indicator and assess signs of slowing economic growth. The yield on the benchmark 10-year Treasury note had increased to 3.0012%, while the yield on the 30-year Treasury bond was up at 3.1504%.
|5:45||CHF Unemployment Rate s.a. (MoM)(May)||2.2%||2.2%|
|09:00||EUR Gross Domestic Product s.a. (QoQ)(Q1)||0.3%||0.3%|
|09:00||EUR Gross Domestic Product s.a. (YoY)(Q1)||5.1%||5.1%|