While Euro recovered against other major currencies, it extended recent decline agains Swiss Franc, with EUR/CHF breaching a near term support level of 1.2162. The IMF urged ECB to consider buying assets including soveriegn bonds on a large scale to counter the stubbornly low inflation. IMF cheif Lagarde said that "inflation is worryingly low across the euro-area countries." She welcomed recent stimulus measures announced by ECB, but she emphasized that "we are not at the end of the road."In a report, IMF note that new asset purcahses would "boost confidence, improve corporate and household balance sheets, and stimulate bank lending."
In UK, BoE MPC member McCafferty said yesterday that the central bank shouldn't "hold back" interst rates for too long. And, "it will be critically important that rises in bank rate are delivered, as far as we are able, at only a modest, gradual pace." Also, "faced with such uncertainties about the likely pace of absorption of slack, a prudent policy maker, in my view, would want to start to remove some of the current extraordinary level of monetary stimulus a little before the output gap is fully closed." But, whether the central bank will raise rates earlier " will depend on how the economy performs over the summer and autumn".And, he said "it would have been damaging if it was portrayed as a surprise".
On the data front, German PPI dropped -0.2% mom, -0.7% yoy in May. Eurozone current account and UK public sector net borrowing will be released later in European session. But main focus will be on Canadian CPI and retail sales to be released later in US session.