ECB’s Hawkish Cut. Hardly a Surprise.

Friday 7th June 2024

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The ECB cut interest rates as expected, but there’s no clear indication of when the next cut will come. NAB’s Gavin Friend says staff forecasts have pushed inflation higher. Hence, a hawkish cut. So much so, you wonder whether they would have carried through if it hadn’t been so clearly signalled beforehand. Now the focus is on the US labour market and what it means for the Fed. The ADP jobs number came in soft earlier in the week and the jobless claims number rose last night, with a softer read is expected tonight. Just as important ifs the question of wages. Q1 labour costs were downgraded yesterday, so will the fall carry through to the May number tonight?

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