As expected, the ECB cut its benchmark interest rates by 25 basis points yesterday.
Meanwhile, the post-meeting statement and press conference offered little clarity on the rate outlook. Indeed, the ECB stated that it is still data reliant and has not committed to any certain rate path.
Meanwhile, updated inflation predictions were moderately higher for this year and 2025. Because the policy decision was consistent with expectations and the ECB remained in data dependent mode, the impact on markets was modest yesterday.
On the currency front, the major FX pairings remained range bound. However, a break above this level could not be sustained.
The primary focus today will be the May US labour market data. The job market remains tight, despite recent softening.
The forecast is expecting payrolls to increase by 185k this month, while the unemployment rate is projected to remain at 3.9%. Meantime, average earnings growth is expected to stay at +3.9% year on year in May. In the Eurozone, the third GDP report is expected to confirm a 0.3% expansion in the first quarter.