Futures Drop As Markets Reasses Fed’s Hawkish Skip; ECB Looms

Futures are lower, reversing much of the post-hawkish FOMC euphoria, as markets digest the Fed meeting, the decision to halt rates while projecting two more rate hikes, the increase in the terminal rate, and when the Fed begins an easing cycle, and concluding that the mix is not as bullish as they thought less than 24 hours ago.  As of 7:30am, emini S&P futures were down 0.4% to 4,400 while Nasdaq futures dropped 0.7%. Treasury yields are climbing after warnings from the Fed yesterday that rates will go higher in the coming months, which also helped pull the USD higher. Commodities are seeing a modest relief rally with Ags leading while gold prices are falling, with the higher rate outlook generally a dampener on appetite for bullion, while oil and iron ore both climb. Today’s macro focus is on Retail Sales and Jobless Claims as CPI and unemployment become the two major data points ahead of the July Fed where the market is pricing ~70% chance of a 25bps hike. The next CPI is on July 12 and NFP is July 7.

In premarket trading, Tesla fell as much as 3% on course to extend losses after the world’s most valuable automaker snapped its record-setting 13-session streak of gains on Wednesday. US-listed Chinese stocks gained after China’s central bank cut interest rates again, this time on one-year loans just minutes before releasing the latest dismal economic data dump, lifting hope for more policy stimulus to come as the latest data pointed to a darkening economic picture. Crypto-related stocks fell in US premarket trading, tracking a dip in Bitcoin as worries re-emerge over the sector’s risks following news that two South Korea-linked crypto platforms have halted withdrawals. Coinbase shares fall as much as 3.6%, Riot Platforms -3.5%. Here are some other notable premarket movers:

• Coherent rose as much as 4.3% in premarket trading, set to extend Wednesday’s gains spurred by the company’s unveiling of new laser processing heads aimed at electric-vehicle manufacturing.
• Domino’s Pizza rises 2.1% in US premarket trading after Stifel upgrades the restaurant chain to buy from hold, predicting delivery sales to stabilize over the next 12 months, while carryout sales grow to new record highs
• Nikola jumps as much as 22% in premarket trading, set to extend gains for a seventh consecutive session — which would be its longest winning streak since November 2020.
• Nvidia falls as much as 1.3% in premarket trading, putting the stock on course to snap a five-day winning streak that has boosted the market value of the world’s most valuable chip company beyond $1 trillion.
• SoFi Technologies drops 3.5% in US premarket trading as Oppenheimer downgrades the online lender to perform from outperform, with the stock’s valuation now seen capturing its positive outlook

After the Fed quashed enthusiasm in markets about the potential for imminent rate cuts, investors are about to get an update from the ECB. The bank is expected to raise its deposit rate by a quarter-point to 3.5% later Thursday – even though Europe officially entered a technical recession just a few days ago – with attention mostly focused on what else officials intend to do to tackle inflation that’s still three times the 2% target.

“With the Fed’s policy rate likely to peak soon, the ECB may not want to be too far behind,” said Geoff Yu, a foreign exchange and macro strategist at BNY Mellon. “As tempting it may be to price a turn, we believe this week’s meeting is far too soon.”

Meanwhile, in a stark reminder just how fragile Europe’s inflationary picture is, concerns over European gas supplies are back on traders’ radar. Bloomberg reported that European natural gas prices spiked as the Netherlands is set to announce it will close the region’s biggest gas site later this year. Benchmark futures soared as much as 24% on Thursday to their highest level since early April.

European stocks were also on the back foot ahead of the ECB decision later today. The Stoxx 600 is down 0.4% and on course to snap a three-day winning streak as mining stocks underperform. In corporate news, SoftwareOne Holding AG surged as much as 21% after Bain Capital offered about $3.2 billion to take the Swiss IT services provider private. Global miners Anglo American and Rio Tinto fell as basic resources stocks led declines in Europe following news that Chinese economic activity softened in May. But retailers were a bright spot, with H&M and Asos Plc rallying on improving prospects. Here are the most notable European movers:

• Hennes & Mauritz shares rise as much as 6.9%, reaching the highest since April 25 and gaining for the fourth session in a row. Jefferies highlights a strong start for the fiscal year’s third quarter
• Informa gains as much as 4.3% to the highest level since February 2020, after the events and publishing firm boosts revenue and operating profit guidance ranges ahead of its AGM
• Asos shares rise as much as 16%, the most since Jan. 12, after the online fast-fashion retailer provided a 3Q sales update and kept its outlook unchanged for the year
• PostNL rises as much as 6.5% after being raised to buy from hold at ING, based on the Dutch delivery company’s 1Q beat and recovery in the parcel volume trend in March and April
• Krones advances as much as 6.4%, the most since early November, as Hauck & Aufhaeuser lifts its rating to buy, citing improving margin expansion for the maker of packaging robots
• SoftwareONE shares rise as much as 21% after Bain Capital offered 2.93 billion Swiss francs ($3.2 billion) in cash to take the company private, a bid the board said materially undervalues the business
• Halma shares drop as much as 9.4%, the most since March 2020, after the UK health and safety sensor tech firm’s FY results showed a decline in its return on sales in the second half of its FY
• Bachem falls as much as 5.7% after Baader Helvea downgrades the shares to reduce from add, giving the Belgian biotech its only negative analyst rating, one reason being currency drag
• Billerud shares fall as much as 11%, the most since May 25, before trimming most losses after the Swedish paper and pulp manufacturer flagged its second-quarter profit will be lower than previously predicted
• Bunzl shares decline as much as 2.8% after the UK distribution group’s trading update implied a slowdown in organic growth in 2Q and flagged volume weakness in its North American business
• HMS Networks falls as much as 7%, the most since December, after the industrial communications firm was downgraded to sell from hold at ABG Sundal Collier, expecting negative order growth

Earlier in the session, Asian markets traded mostly higher; Chinese equities gained after the People’s Bank of China cut a key lending rate amid speculation that more stimulus is on the way. That also boosted US-listed Chinese stocks, with Alibaba Group and Baidu among those advancing in premarket trading. The PBOC’s move also forms part of broader stimulus efforts to support real estate and domestic demand. Data showing retail sales moderated more than expected in May added to worries about further slowing in China. Industrial production was also lower, but met consensus forecasts.

• Hang Seng and Shanghai Comp. were positive with outperformance in Hong Kong after the HKMA kept rates unchanged for the first time since March 2022 in lockstep with the Fed, while the advances were led by property names amid expectations for more support measures for the industry and after Chinese House Prices returned to growth. Furthermore, the PBoC cut its 1-year MLF rates by 10bps following similar cuts to short-term funding rates although participants also digested disappointing activity data from China in which both Industrial Production and Retail Sales missed estimates.
• ASX 200 was kept afloat in rangebound trade with stellar jobs data partly clouded by yield curve inversion.
• Nikkei 225 benefitted from currency depreciation and encouraging data including Exports and Machinery Orders.

In FX, the dollar trimmed its first advance in three days, gains prompted by traders mulling prospects for further US rate hikes. The Aussie dollar is among the best-performing G10 currencies, rising 0.3% versus the greenback, after employment data smashed expectations. The euro strengthened ahead of the ECB policy announcement. Ahead of tomorrow’s BOJ rate decision, selling in the yen pushed the currency to the lowest level since November, prompting a warning from Japanese Chief Cabinet Secretary Hirokazu Matsuno that excessive movements weren’t desirable; not that Japan can do anything to contain said movements.

In rates, treasuries are lower with the US two-year yield up 3bps at 4.72% as euro-zone yields climb ahead of ECB rate decision and President Christine Lagarde’s press conference; German two-year yields add 6bps. The TSY curve is flatter with 2s10s, 5s30s spreads also rangebound. US yields are cheaper by 5bps across front-end of the curve with 2s10s, 5s30s spreads flatter by 1.2bp and 3bp on the day; 10- year yields at 3.825%, cheaper by 3.5bp vs Wednesday’s close with bunds lagging by 2.5bp in the sector ahead of ECB, while gilts mildly outperform.

In commodities, crude futures advance with WTI rising 0.5% to trade near $68.60. Spot gold falls 0.4% to around $1,938. Bitcoin is down 0.3%

To the day ahead now, and the main highlight will be the ECB’s latest policy decision, along with President Lagarde’s press conference. In addition, we’ll hear from the ECB’s Nagel and Villeroy, and BoE Deputy Governor Cunliffe. On the data side, US releases include retail sales, industrial production, and capacity utilisation for May, the Philadelphia Fed’s business outlook and the Empire State manufacturing survey for June, as well as the weekly initial jobless claims.

Market Snapshot

• S&P 500 futures down 0.4% to 4,400
• MXAP little changed at 168.42
• MXAPJ up 0.7% to 531.29
• Nikkei little changed at 33,485.49
• Topix little changed at 2,293.97
• Hang Seng Index up 2.2% to 19,828.92
• Shanghai Composite up 0.7% to 3,252.98
• Sensex down 0.3% to 63,044.94
• Australia S&P/ASX 200 up 0.2% to 7,175.33
• Kospi down 0.4% to 2,608.54
• STOXX Europe 600 down 0.2% to 463.91
• German 10Y yield little changed at 2.49%
• Euro little changed at $1.0829
• Brent Futures up 0.7% to $73.69/bbl
• Gold spot down 0.5% to $1,932.09
• U.S. Dollar Index up 0.20% to 103.15

Top Overnight News from Bloomberg

• China’s economic momentum softens, with industrial production coming in at +3.5% in May (inline with the Street, but down from +5.6% in April) and retail sales +12.7% (down from +18.4% in April and below the Street’s +13.7% forecast). BBG
• China cuts rates – as expected, China lowered the MLF (medium-term lending facility) rate by 10bp (the move follows a cut to the 7-day repo rate earlier this week, and the gov’t is widely anticipated to take the Loan Prime Rate down 10bp next week). BBG
• China grapples with rising worker unrest as factory strikes hit a 7-year high amid soft growth, weak pay, and fewer job opportunities. RTRS
• The United States played down expectations of any breakthrough from the first trip by a U.S. Secretary of State to China in five years, after a tense call with China’s foreign minister ahead Antony Blinken’s visit to Beijing next week. RTRS
• Support for giving aid to Ukraine is starting to weaken in Congress amid growing calls for fiscal austerity. NYT
• The ECB is set to deliver what may be the penultimate increase of this hiking cycle. It’s expected to lift the deposit rate by a quarter point to 3.5%, but the focus is mostly on any guidance about future increases. Consensus is for one final hike next month. Markets don’t expect much but a more hawkish tone may boost the euro. BBG
• US retail sales probably dipped 0.2% month on month in May, giving back some of April’s 0.4% gain, as consumers spent less on autos and energy, Bloomberg Economics said. Activity at restaurants and bars should show continued spending. Kroger reports sales premarket. BBG
• Washington is hoping to strike an informal deal with Iran that would limit Tehran’s nuclear activities and free American prisoners. NYT
• The jump in used-car costs that propped up US inflation last month is widely expected to swing into reverse in June, finally delivering a slowdown in one of the most-watched price gauges. Leading indicators of auto prices compiled by private firms like Manheim have already begun falling — and those declines should begin filtering into the official Bureau of Labor Statistics data for consumer prices in the next monthly report, due July 12. BBG

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mostly higher but with gains capped in the aftermath of the FOMC where a hawkish knee-jerk reaction to the Fed’s dot plots was partially unwound during the press conference after Powell distanced himself from projections, while the attention in the region shifted to the slew of key data releases. ASX 200 was kept afloat in rangebound trade with stellar jobs data partly clouded by yield curve inversion. Nikkei 225 benefitted from currency depreciation and encouraging data including Exports and Machinery Orders. Hang Seng and Shanghai Comp. were positive with outperformance in Hong Kong after the HKMA kept rates unchanged for the first time since March 2022 in lockstep with the Fed, while the advances were led by property names amid expectations for more support measures for the industry and after Chinese House Prices returned to growth. Furthermore, the PBoC cut its 1-year MLF rates by 10bps following similar cuts to short-term funding rates although participants also digested disappointing activity data from China in which both Industrial Production and Retail Sales missed estimates.

Top Asian News

• PBoC conducted CNY 237bln in 1-year MLF lending with the rate cut by 10bps to 2.65%.
• HKMA maintained its base rate unchanged at 5.50%, as expected.
• China National Bureau of Statistics said the economic recovery is not yet solid but noted that Q2 growth will be significantly faster than Q1 and that China’s economy is resilient despite facing some pressures. China’s stats bureau also stated that pressure on employment and structural problems persist, while it added that consumption recovery faces some hurdles and China will support consumption growth.
• China’s commerce Ministry says will continue to improve consumption policies and introduce a series of policy measures to support the recovery and expansion of consumption; China faces relatively big pressure on exports.
• JP Morgan cuts China’s 2023 full year GDP growth forecast to 5.5% (prev. 5.9%).
• Japan’s opposition party is making final preparations to submit a no-confidence vote on Friday.

European bourses are somewhat mixed but have generally been edging lower throughout the morning pre-ECB & post-FOMC, Euro Stoxx 50 -0.4%. Sectors are similarly lower overall with Basic Resources lagging on base metals prices while Banks are weighed on by CJEU’s ruling on Polish mortgages; though, Retail names buck the trend after H&M’s update. Stateside, futures are lower across the board with the NQ -0.6% as yields continue to rise. Overall, the ES remains just above the 4400 mark ahead of US data and as the FOMC blackout lifts to feature Bullard, Barkin & Waller on Friday’s schedule.

Top European News

• UK PM Sunak abandoned the plan for a supermarket price cap following a backlash, according to The Telegraph.
• UK’s ONS says 17% of companies expect to increase prices in the month ahead; lowest since the series began in March 2022.
• Brussels is under pressure to impose restrictions on Chinese electric cars, over fears that imports are flooding the European market at a speed and scale that threaten the Continent’s own production of such vehicles, according to Politico.
• EU Top Court says Polish banks cannot charge for the cost of capital in FX mortgage contracts which have been deemed as invalid, consumers with such contracts can demand compensation from banks. In response, Polish Banking Regulator KNF says the CJEU ruling on Polish FX loans is negative for the Polish banking sector and the economy. Click here for details & analysis.

FX

• Hawkish dot plots help Dollar recover from pre-FOMC lows, DXY firmer within 103.380-102.910 range.
• Yen sharply lower pre-BoJ on yield and policy divergence dynamics, USD/JPY around 141.00 between 141.50-139.95 parameters.
• Euro eyeing ECB for independent direction via guidance beyond widely expected 25 bp hike, EUR/USD back above 1.0800.
• Aussie underpinned after stellar jobs data, but Kiwi undermined as NZ tech recession confirmed, AUD/USD reclaims 0.6800+ status, NZD/USD loses 0.6200 handle and AUD/NZD cross bounces almost big figure from sub-1.0950
• Norges Bank Regional Network Survey (Q2): Slightly better outlook, but wide variations. Click here for details & analysis.

Fixed Income

• Bonds extend post-Fed declines and curves remain flatter on balance on hawkish dot plot trajectory.
• Bunds pivot 133.00, Gilts sub-95.00, albeit holding up better having traded above par and T-note hovering within 112-31+/16+ range.
• ECB in focus and expected to hike 25 bp, but several top tier US data releases also ahead.

Commodities

• Commodities are generally in familiar ranges in what has been relatively quiet trade post-FOMC and pre-ECB; crude benchmarks firmer, but in familiar ranges.
• With the exception of base/industrial metals which are dented after China’s disappointing activity data whereby both industrial production and retail sales missed expectations.
• Spot gold is unable to glean any support from the modest equity pressure that has crept in throughout the European morning. Though, similarly, it hasn’t been tarnished too much by the stronger USD.
• Kremlin says it sees no positive prospects for future of Black Sea Grain Deal; parts of grain deal affected Russia remain unfulfilled, cannot go on like this forever.

US Event Calendar

• 08:30: May Retail Sales Advance MoM, est. -0.2%, prior 0.4%
• 08:30: May Retail Sales Ex Auto MoM, est. 0.1%, prior 0.4%
• 08:30: May Retail Sales Control Group, est. 0.2%, prior 0.7%
• 08:30: May Import Price Index MoM, est. -0.5%, prior 0.4%
• 08:30: May Import Price Index YoY, est. -5.6%, prior -4.8%
• 08:30: May Export Price Index MoM, est. -0.1%, prior 0.2%
• 08:30: May Export Price Index YoY, est. -8.4%, prior -5.9%
• 08:30: June Initial Jobless Claims, est. 245,000, prior 261,000
• 08:30: June Continuing Claims, est. 1.77m, prior 1.76m
• 08:30: June Philadelphia Fed Business Outl, est. -14.0, prior -10.4
• 08:30: June Empire Manufacturing, est. -15.1, prior -31.8
• 09:15: May Capacity Utilization, est. 79.7%, prior 79.7%
• 09:15: May Manufacturing (SIC) Production, est. -0.1%, prior 1.0%
• 09:15: May Industrial Production MoM, est. 0.1%, prior 0.5%
• 10:00: April Business Inventories, est. 0.2%, prior -0.1%
• 16:00: April Total Net TIC Flows, prior $56.7b
• 16:00: April Net Foreign Security Purchases, prior $133.3b

DB’s Jim Reid concludes the overnight wrap

So a dovish hike last month turned into a hawkish pause this month as the Fed ended a series of 10 successive rate hikes last night but signalled that more may well be required, especially via a more hawkish dot plot that signalled two more hikes this year. However we should say that two years ago at the June meeting the median dot for the end of 2023 was at a lowly 0.6%, so these aren’t destiny. To be fair, Chair Powell acknowledged the uncertainty in future forecasts and therefore cautioned against reading too much into the dots. If and when the facts change those dots will be forgotten. Rates and equities sold off after the statement but recovered to being broadly unchanged through the press conference and into the close. It’s only overnight that we’ve seen a more aggressive selloff in rates again, which has taken 2yr and 10yr Treasury yields up to their highest level since SVB’s collapse, although equity futures remain flat still.

In terms of the decision, holding rates was seen as allowing the committee to “assess additional information and its implications for monetary policy” and to determine “the extent of additional policy firming that may be appropriate”. The wording of the statement was largely unchanged from the last meeting, but the market initially took a clear hawkish interpretation in response to an upgrading of the Fed’s dot plot projection. This showed the median member expecting two more 25bp hikes by the end of 2023, with 12 of the 18 members at that point or above, whereas only two members pencilled in no further hikes. So a lot to talk down ahead of the next July meeting in under 6 weeks’ time. The projections also saw 2023 core PCE revised up to 3.9% (from 3.6% in March).

In the press conference, Chair Powell’s message was consistent with the Fed seeing June only as a temporary pause, noting the dot plot signal that nearly all members “expect that it will be appropriate to raise interest rates somewhat further by the end of the year”. Still, the market rallied as Powell focused on data-dependence and noted, in the context of the end-23 dot plot, that he did not “have a lot of confidence that we can see where the fed funds rate will be that far in advance”. So an admission of the uncertainties.

He also said that the Committee didn’t make any decision about “what will happen at the next meeting” or about “going to an every other meeting” approach, but emphasised that July will be a “live meeting”. Powell’s comments did contain some additional hawkish undertones, including a strong push back against the idea of rate cuts later in 2023, highlighting that “not a single person on the Committee wrote down a rate cut this year, nor do I think it is at all likely to be appropriate”, and noting that core inflation remains high and has not yet responded much to the policy tightening. Futures ended the day pricing in a 62% chance of a Fed rate hike at the July meeting, but that’s since risen to 69% this morning. Furthermore, the implied pricing for December’s meeting rose +6.0bps to 5.18%, and has risen further to 5.23% overnight, leaving it almost 150bps above its SVB lows. An interesting feature of the reaction is how markets are still sceptical that the Fed will be able to lift rates as far as the median dot implies, with futures still only expecting one more hike remaining rather than two. Our US economists have maintained their baseline for a final 25bp rate hike in July, with the Fed then remaining on hold into early 2024. See their reaction here for details.

Markets largely reversed their initial negative reaction over the course of Powell’s press conference. The S&P 500 had traded -0.7% down intra-day following the FOMC decision but recovered to eke out a marginal gain (+0.08%), making it the first time since November 2021 that the S&P 500 has advanced 5 days in a row. The equity index was split and was led by semiconductors (+2.7%), consumer durables (+2.1%), and transports (+1.5%), while healthcare (-1.8%), banks (-1.2%), and energy (-1.1%) were the biggest laggards. US 2yr yields had jumped by 17bp after the FOMC press statement but reversed around 10bp of this move to close slightly higher on the day (+2.2bp) at 4.69%. Meanwhile, US 10yr yields closed lower on the day (-2.7bp) at +3.79%, also reversing most of an 8bp post-FOMC spike. Brought together the 2s10 flattened to -90.2bps, the most inverted since 9 March. In fact it’s only closed more inverted on five days in early March of this year, over the entire last 40 years. This morning however, yields have seen a further move higher, with the 2yr yield (+5.6bps) and the 10yr yield (+4.1bps) up to 4.74% and 3.83% respectively, marking their highest level since SVB’s collapse.

Overnight in Asia, we’ve also had some significant central bank news after the People’s Bank of China cut its 1yr medium-term lending facility rate by 10bps to 2.65%. That came shortly ahead of some further downside surprises in the latest economic data for May, which showed retail sales were up +12.7% year-on-year (vs. +13.7% expected). Furthermore, YTD property investment was down by -7.2% on a year-on-year basis, which again was worse than the -6.7% reading expected by the consensus.

The presence of further stimulus has helped support risk assets in Asia this morning, with the major equity indices mostly advancing. That includes the Hang Seng (+0.83%), the CSI 300 (+0.54%), the Nikkei (+0.46%) and the Shanghai Comp (+0.09%), although the KOSPI has seen a -0.30% fall. There were also some interesting stories elsewhere in the region. For instance, the Japanese Yen weakened to 141.29 per US Dollar, which is its lowest level since November, and led to comments from Japan’s Chief Cabinet Secretary Hirokazu Matsuno that excessive movements weren’t desirable. Meanwhile in Australia, a strong employment report with +75.9k more jobs in May (vs. +17.5k expected) meant that the 3s10s yield curve inverted for the first time since 2008. Finally, we got confirmation that New Zealand’s economy had been in recession, with Q1 seeing a second consecutive contraction in the economy with a -0.1% decline.

With the Fed out of the way, attention will now turn to the ECB, who are making their own policy decision later today. In terms of what to expect, it’s widely anticipated there’ll be another 25bp hike, which would take the deposit rate up to 3.50%. So the bigger question will be what the ECB signals going forward, and whether that aligns with market pricing that expects just one more hike after today’s. Our European economists expect the message to tilt hawkish and think the ECB will emphasise the persistence of underlying inflation and ongoing risks to the upside. Indeed, even though inflation came in below consensus in May, core CPI was still running at +5.3%, and our economists expect upward momentum from tourism-related pricing in the summer. Keep an eye out for the latest ECB staff forecasts as well, which they think will show upward revisions to core inflation for 2023 and 2024. See our economists’ preview of the meeting here.

Ahead of the ECB, there’d been a decent risk-on tone among European assets. Equities moved higher across most of the continent, with the STOXX 600 (+0.36%) advancing for a 3rd consecutive day. Sovereign bonds also sold off for the most part, with yields on 10yr bunds (+2.8bps), OATs (+3.1bps) and BTPs (+3.0bps) moving higher. And for the German 2yr yield (+4.2bps), there was another milestone as it hit a post-SVB high of 2.98%.

The main exception to this pattern came from the UK, where gilts recovered some ground after their sharp selloff on Tuesday. That was evident across the curve, with yields on 2yr gilts down -7.9bps, and those on 10yr gilts down -4.1bps. However, it’s still worth noting that gilt yields have climbed sharply over the last month even with that partial recovery, and yesterday brought fresh reports that mortgage providers were withdrawing their products, which demonstrates the impact that these moves are having on the real economy. Furthermore, investors are continuing to fully price in five further 25bp rate hikes, which if realised would take Bank Rate up to 5.75%, which is the highest terminal rate priced in for the major central banks among the developed economies.

It might seem like old news now, but earlier in the day US Treasuries had rallied thanks to a downside surprise in the US PPI data. It showed headline producer prices fell by a monthly -0.3% (vs. -0.1% expected), which took the year-on-year rate down to +1.1% (vs. +1.5% expected). Bear in mind that only a year earlier, that stood a whole 10 points higher at +11.1%, and the declines take it down to its lowest since December 2020. The core PPI measure was a bit more resilient, with the monthly measure at +0.2% as expected. But even that took the year-on-year print down to +2.8% (vs. +2.9% expected), the lowest since February 2021.

Finally, when it came to yesterday’s other data, the UK’s monthly GDP growth for April was in line with expectations at +0.2%. We also had the Euro Area industrial production print for April, which grew by +1.0% (vs. +0.9% expected).

To the day ahead now, and the main highlight will be the ECB’s latest policy decision, along with President Lagarde’s press conference. In addition, we’ll hear from the ECB’s Nagel and Villeroy, and BoE Deputy Governor Cunliffe. On the data side, US releases include retail sales, industrial production, and capacity utilisation for May, the Philadelphia Fed’s business outlook and the Empire State manufacturing survey for June, as well as the weekly initial jobless claims.