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Economic calendar (GMT0):
05:00 Japan Leading Economic Index April 107.1 106.2 106.6
05:00 Japan Coincident Index April 114.5 111.1
06:00 Germany Trade Balance April 14.8 14.3 17.7
06:00 Germany Industrial Production s.a. (MoM) April -0.5% +0.4% +0.2%
06:00 Germany Industrial Production (YoY) April +3.0% +1.8%
06:00 Germany Current Account April 19.5 18.4
06:45 France Trade Balance, bln April -4.9 -5.0 -3.9
07:00 Switzerland Foreign Currency Reserves April 438.9 444.4
07:15 Switzerland Consumer Price Index (MoM) May +0.1% +0.2% +0.3%
07:15 Switzerland Consumer Price Index (YoY) May 0.0% +0.1% +0.2%
08:30 United Kingdom Consumer Inflation Expectations Quarter II +2.8% +2.6%
The U.S. dollar traded lower against the most major currencies after the European Central Bank’ interest rate cut. The European Central Bank cut its interest rate to 0.15% from 0.25%. Analysts had expected a cut to 0.1%.
The ECB also cut its marginal lending to 0.40% from 0.75% and reduced its deposit rate to -0.10% from 0.0%. The European Central Bank is the world’s first major central bank to use a negative rate. The deposit rate of -0.10% means that commercial bank will be charged for holding their reserves. This measure should spur commercial banks to ramp up lending.
Investors are awaiting the U.S. jobs market data later in the day.
The New Zealand dollar increased against the U.S dollar. The kiwi was supported by after the European Central Bank’ interest rate cut. No economic data was published in New Zealand.
The Australian dollar traded lower against the U.S. dollar after the release of the AI Group/HIA construction index in Australia, but later recovered its losses. The AI Group/HIA construction index for Australia increased to 46.7 in May from 45.9 in April. The index still remained in contractionary territory due to the weakness in engineering and commercial construction. Figures above 50 indicate expansion while figures below signal contraction.
The Japanese yen traded higher against the U.S. dollar after the European Central Bank’ interest rate cut. Japan’s leading economic index declined to 106.6 in April from 107.1 in March, but exceeding expectations for a decline to 106.2.
Japan’s coincident index slid to 111.1 in April from 114.5 in March.
EUR/USD: the currency pair traded mixed
GBP/USD: the currency pair traded mixed
USD/JPY: the currency pair declined to Y102.25
The most important news that are expected (GMT0):
12:30 Canada Labor Productivity Quarter I +1.0% +0.7%
12:30 Canada Employment May -28.9 +12.3
12:30 Canada Unemployment rate May 6.9% 6.9%
12:30 U.S. Average hourly earnings May 0.0% +0.2%
12:30 U.S. Nonfarm Payrolls May 288 219
12:30 U.S. Unemployment Rate May 6.3% 6.4%
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