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  • ECB President Mario Draghi well and truly got yesterday’s trading started with a bang. Speaking at 9am yesterday morning Mr Draghi said the ECB would look to introduce additional stimulus measures if required, with a slowdown in economic growth threatening the return of inflation to the ECB’s 2% target.
  • Mr Draghi said there was still ‘considerable headroom’ for asset purchases, rates could be cut further and that the ECB could adjust its guidance. With regards to potential negative interest rates he added that mitigating measures could be provided to offset unwelcome side effects.
  • The Euro was sold off aggressively in FX space following Draghi’s comments.
  • In the immediate aftermath GBP/EUR rallied from the Mid 1.1100’s to 1.1200, whilst EUR/USD plunged from 1.1240 to 1.1190.
  • Draghi’s comments yesterday morning came before the release of Inflation figures which revealed that Eurozone CPI stood at a one-year low of 1.2% on an annual basis in May.
  • German ZEW Economic Sentiment -21.1 (-5.7 Exp).
  • One person who did not take Mario Draghi’s comments particularly well was US President Donald Trump. Tweeting yesterday afternoon the President said ‘Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.’
  • Canadian Manufacturing Sales m/m -0.6% (+0.6% Exp)
  • US Building Permits 1.29M (1.30M Exp)

  • The five remaining MP’s in the Tory Leadership race took part in a live debate on BBC yesterday evening but no clear winner emerged from the hour long debate. Unsurprisingly Brexit was the key issue discussed. Dominic Rabb was knocked out of the race following yesterday’s ballot with the remaining 5 candidates being Boris Johnson, Jeremy Hunt, Michael Gove, Sajid Javid and Rory Stewart.
  • Boris Johnson remains the clear favourite amongst his fellow MP’s securing 126 votes in this most recent round of voting. His closest challenge with 46 votes was Jeremy Hunt.
  • According to the Times, Labour Leader Jeremy Corbyn will back a move to change party Brexit policy and support a second referendum.
  • New Zealand Current Account 0.68Bn (0.16Bn Exp)
  • Japan Trade Balance -0.61Tn (-0.80Tn Exp)
  • German PPI m/m -0.1% (0.2% Exp)
  • Eurozone Current Account 20.9Bn (23.2Bn Exp)
  • UK CPI headlines this morning with inflation expected to come in at 2.0% y/y.
  • This afternoon could prove quiet as markets and traders wait in anticipation for this evening’s US Federal Reserve monetary policy meeting. Whilst rates are likely to remain on hold this month markets are now pricing in a significant probability of a rate cut next month.


Current at time of distribution

Currency Pair Interbank Rate % Change on Day
GBP/EUR 1.1210 -0.04
GBP/USD 1.2556 0.00
EUR/USD 1.1199 +0.05
AUD/USD 0.6873 -0.04
Current at time of distribution
Time (GMT) Region Data Release Forecast Previous
09.30 GBP CPI y/y 2.0% 2.1%
09.30 GBP PPI Input m/m 0.2% 1.1%
11.00 GBP CBI Industrial Order Expectations -11 -10
13.30 CAD CPI m/m 0.1% 0.4%
15.00 EUR ECB President Draghi Speaks
19.00 USD Federal Reserve Funds Rate <2.50% <2.50%
19.00 USD Fed FOMC Statement
19.30 USD Federal FOMC Press Conference