EUR:
The main topic for today is The European Central Bank potentially taking action
to tackle low inflation in the eurozone and work on bloc’s recovery. The latest
inflation data published this week has added to the momentum of a potential
change.

An unexpected fall in annual inflation to 0.5% in May, from 0.7% in April, has

 EUR:
The main topic for today is The European Central Bank potentially taking action
to tackle low inflation in the eurozone and work on bloc’s recovery. The latest
inflation data published this week has added to the momentum of a potential
change.

An unexpected fall in annual inflation to 0.5% in May, from 0.7% in April, has
increased the chances of deflation, which is considered an even more serious
economic threat than hyper-inflation. 

Today’s announcements are also vital due to the eurozone GDP growing by just
0.2% in the first three months of 2014.

Spain’s service sector expanded for the seventh month running, although the
pace slowed a little last month. Firms also cut their output prices in an
attempt to drive demand -adding to deflationary pressures.

Figures from France showed the service sector PMI fell to 49.1 in May, from
50.4 in April, indicating that activity across the sector fell.

USD:
US service sector growth picked up in May with PMI rising to 56.3, up from 55.2
in April.This is the 53rd month in a row that the Service sector PMI has come
in above the 50-point mark, indicating expansion.

America’s trade deficit has widened to its largest level in two years, with
exports falling by 0.2% in April and imports rising by 1.2%. This caused the
Dollar to weaken off in the afternoon session.

Meanwhile, US productivity fell at its fastest rate in six years in the first
three months of 2014 and job creation across America’s private sector fell to
its lowest level since January.Figures show 179,000 new jobs were created by US
firms in May this is a four month low.

Today:
We have had Australia Trade balance for April showing an unexpected deficit of
122 million compared to a solid surplus of 902 million in March.The main cause
for the deficit was the drop in coal prices that accounted for  $361
million fall in the value of coal exports for the month of of April

Key Announcements:
12:00 – GBP – BoE interest rate
decision. (Expected to stay at 0.5%).
12:00 – GBP – BoE asset purchase
facility for June (expected to remain at 375B)
12.45 – EUR -: ECB interest rate
decision. (Expected to fall to 0.1% from 0.25%)
13.30 – EUR – ECB monetary policy
statement and press conference (Draghi)
13.30 – USD – Initial US jobless
claims figures for May (expected to go to 310m from 300m)

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