ECB to remain very accommodative

The euro is not much changed this morning following the ECB meeting yesterday, against the dollar it is trading a tad below $1.18 and has gained slightly on sterling, up to 85.75p, while the pound is hovering just above $1.37 against the US currency

There’s not a whole lot of change in government bond yields either with US and German 10-year yields at 1.28% and -0.41% respectively. Meanwhile, European stocks closed about 0.8% higher yesterday, while US equities were broadly flat on the day

The ECB left policy on hold following yesterday’s Governing Council meeting and said it is committed to maintaining  “a persistently accommodative monetary policy stance to meet its (new) 2% inflation target”. In particular, it said it expects interest rates “to remain at their present or lower levels” until it sees inflation durably reaching 2% over its 3-year forecasting horizon, which it says may imply a transitory period in which inflation runs moderately above target

UK retail sales rose by 0.5% month on month in June beating expectations of a slight fall while GFK consumer confidence also rose in July, up to -7 from June’s -9 reading

On the agenda today are flash PMIs for July in the Euro area, UK and US