There were no economic reports from Uncle Sam as traders were off enjoying the Memorial Day holiday while Draghi’s speech weighed on euro pairs a bit.
- ECB head Draghi: Headline inflation and wage growth have been subdued
- Draghi: Downside risks to growth are diminishing
- U.K. ComRes opinion poll: Conservatives 46%, Labour Party 34%
ECB Governor Draghi’s testimony
Head honcho Draghi was actually less downbeat in his recent speech, acknowledging that economic risks and the threat of deflation have diminished. However, he also pointed out that headline CPI and wage growth have been subdued.
According to Draghi, this means that it’s too early to say whether or not any adjustments in interest rates are warranted. He said that the limits on their bond purchases will stay in place as the region needs “extraordinary amount” of monetary policy support to keep the recovery going.
U.K. election opinion polls
The pound made a bit of a bounce against its peers as a poll by ComRes for The Independent revealed a wider lead for Theresa May’s Conservative Party versus Corbyn’s Labour Party.
The latest survey showed that support for Conservatives stands at 46% while that of Labour is at 34%, representing a larger gap compared to the 5-point gap reported by YouGov. This eased fears that a government shakeup is underway, potentially leading to more uncertainty and instability leading up to Brexit negotiations.
Major Market Mover(s):
The shared currency brushed off optimistic remarks from Draghi and chose to focus on his remarks citing the need for “extraordinary” monetary policy support.
EUR/USD is down from 20 pips to 1.1141 (-0.19%), EUR/JPY is down 27 pips to 123.91 (-0.23%), EUR/GBP dropped 13 pips to .8680 (-0.15%) and EUR/AUD dipped 32 pips to 1.4969 (-0.20%).
Watch Out For:
- 12:30 am GMT: Japanese household spending y/y (-0.7% expected, -1.3% previous)
- 12:30 am GMT: Japan’s unemployment rate (no change from 2.8% expected)
- 12:30 am GMT: Japanese retail sales (2.2% expected, 2.1% previous)
- 2:30 am GMT: Australian building approvals (3.2% expected, -13.4% previous)
- 6:00 am GMT: BOJ core CPI (-0.1% previous)