No rate hikes for the ECB until Summer 2019

• ECB remained on hold yesterday as was widely expected and it seems to be the case that it will remain so until the summer of 2019.
• Yesterday’s interest rate decision was overshadowed by the dovish accompanying statement which stated that the bank does not intend to make any rate hikes until the summer of 2019.
• On the EUR positives, it should be noted that the ECB announced the gradual tapering of its QE program, starting end of September and with a final wrap up by the end of the year.
• EUR/USD dropped by some 300 pips scoring the highest losses and we could see the EUR weakening further should it be guided by the decision over the next few days.

BoJ remains on hold at -0.10%

• BoJ remained on hold at -0.10% as was widely expected.
• The accompanying statement had a rather neutral to dovish tone as it downgraded it’s assessment of the CPI and left unchanged the pledge to buy JGB’s at a pace of around 80trl per year.
• Also it should be noted that the bank seems to maintain the JGB 10 year yield target around 0% and that it’s inflation expectations are moving sideways.
• The market did not have much of a reaction on the news as the USD/JPY remained rather stable and we could see the Yen bypassing the meeting in the next few days.

Today’s other economic highlights

• Eurozone: Final CPI for May, Survey: +1.9% yoy Prior: +1.9% yoy, 09:00 (GMT), could strengthen EUR
• Eurozone: Final Core CPI for May, Survey: +1.1% yoy Prior: +1.1% yoy, 09:00 (GMT), could support EUR
• US: Industrial Production for May, Survey: +0.2% mom Prior: +0.7% mom, 13:15 (GMT), could weaken USD
• US: Preliminary U. Michigan Sentiment for June, Survey: 98.5 Prior:98.0, 14:00 (GMT), could strengthen USD

IronFX Daily Report ‘June 15th’