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ECB Rate Decision in Todays Calendar

  • US major indices plummeted after FED rate hike decision yesterday
  • European markets await ECB and BoE meeting later this day
  • China economy slowdown

Wall Street declined sharply after yesterday’s FED interest rate hike. FOMC delivered a 25 basis point increase to 5.00-5.25% – the highest level since June 2006 peak. 

Although the Fed suggested it may slow down its rate hike cycle, Jerome Powell emphasized that interest rates may still increase if inflation persists. Currently, the markets have priced in the end of the tightening cycle after the 10th consecutive rate hike. Powell also warned that tighter credit conditions are likely to weigh on economic activity and the job market. This caused investors to become more risk-averse and caused gold to reach record highs as a safe haven asset. Market data indicates that there is a 92% probability that the Fed will pause its rate hikes in June. 

The European markets are set to open lower on Thursday as investors await the upcoming ECB monetary policy meeting. It is widely expected that the ECB will deliver a 25pb rate hike. The meeting statement is scheduled to be released shortly after the rate decision is announced at 1:15 pm BST time.

Today, Chinese PMI data was released at 2:45 am BST. The Caixin PMI index for the industrial sector shows a slight contraction in factory activity. The index came out worse than expected, with a reading of 49.5 compared to the forecast of 50.0 and the previous reading of 50.0. The Caixin index reflected the official index and pointed to the weakening market demand.

Today’s calendar:

  • 8:15 BST: Services PMI in Spain
  • 9:30 BST: Service PMI for the UK
  • 10:00 BST: PMI data for the UE
  • 1:15 BST: ECB interest rate decision
  • 1:30 BST: Weekly Jobless Claim, US
  • 3:00 BST: Ivey PMI for Canada

Bankers’ speeches

  • 1:45 BST: Lagarde press conference
  • 3:15 BST: Lagarde speech
  • 5:50 BST: Bank of Canada Chairman Macklem speaks
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