Talking Points:
- Euro Looks for Greece Deal Clues at Presser Following ECB Rate Decision
- British Pound Eyes UK PMI Data to Inform BOE Interest Rate Hike Outlook
- Australian Dollar Gains as Upbeat GDP Data Undercuts RBA Rate Cut Bets
A monetary policy announcement from the European Central Bank headlines the economic calendar in the hours ahead. A change in policy seems overwhelmingly unlikely, with the monetary authority seemingly on auto-pilot as it continues to implement its €60/month QE effort. That puts the spotlight on ECB President Mario Draghi’s press conference following the rate decision. Greece-related commentary is likely to take top billing, with traders particularly keen to learn the details of a last-ditch funding deal offer made by Athens’ creditors yesterday.
The final batch of May’s UK PMI figures is likewise on tap. The Composite gauge is expected to print at 58.4, implying the pace of manufacturing- and service-sector activity growth remained unchanged on whole compared with the prior month. UK economic news-flow has tended to underperform relative to consensus forecasts over recent months, opening the door for a downside surprise. Such an outcome may weigh on the British pound as traders push out the expected timeline for the onset of BOE tightening.
The Australian dollar outperformed in otherwise quiet overnight trade. The move followed better-than-expected GDP figures that showed output grew 0.9 percent in the first quarter, topping economists’ forecasts projecting a 0.7 percent increase. The Aussie’s advance tracked an advance in front-end bond yields, suggesting the upbeat result helped scatter RBA rate cut expectations. Easing bets have been dissipating since yesterday’s policy announcement.
