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Thursday sees some early second tier data releases, but the European Central Bank policy decision and the U.S. May CPI release are the day's standout highlights.
ECB Bond Buying
Thursday meeting sees focus on the pace of bond buying under the current PEPP, the latest projections for the economic outlook and any progress towards the soon to be revealed strategy review will be the main points of interest for financial markets, with all the main policy settings expected to be left unchanged.
The benchmark deposit rate is set to stay at -0.5%, with QE levels seen unchanged from current levels, although there could be some tweaking of language around expected pace in the policy statement.
The staff projections will likely see growth called higher in 2021 and 2022, and inflation higher in 2021, although little changed from the March projections in both 2022 and 2023.
Price Rises
U.S. CPI should grow 0.4% following a 0.8% gain in April, according to Bloomberg. From a year earlier, CPI is forecast to increase 4.7%, the fastest since 2008. Prices for things like airfare and hotel stays, hit hard by pandemic shutdowns, are expected to have increased during the re-opening.
Goods prices should also increase, driven by supply chain disruptions and materials and worker shortages. Excluding food and energy, core CPI should increase 0.4%, according to Bloomberg.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.