Focus on the ECB today

The euro is a touch weaker against the dollar and sterling ahead of the ECB’s monetary policy announcement later today, trading around $1.02 and at about 85p respectively, while the pound is hovering  just under $1.20 against the US currency

Equity markets in Europe ended broadly flat yesterday while US stocks chalked up modest gains. In bond markets, US and German 10-year  bond yields are largely unchanged at 3.03% and 1.25% respectively, but equivalent Italian yields are about 10bps higher with the country’s government on the brink of collapse

The ECB is set to raise interest rates by 25bps at the conclusion of today’s meeting (assuming it sticks to the formal guidance it gave at its June meeting), the first hike in rates since this month eleven years ago. It is also likely to reiterate than a larger increase may be on the cards at the next meeting in September, with gradual but sustained increases thereafter

The European Commission has proposed that member countries cut gas consumption by 15% between August this year and March next year in response to the threat of a halt to Russian gas supplies to the bloc. The cut in consumption would be voluntary but could become mandatory depending on how the situation evolves

The race to be the next leader of the Tory party – and the next Prime Minister of the UK – is down to two, former Chancellor Rishi Sunak and current Foreign Secretary, Liz Truss, who has pioneered the Northern Ireland Protocol Bill which, if passed into law, would allow the UK to unilaterally override most parts of the Protocol agreed with the EU

It is relatively quiet data-wise today with jobless claims in the US the main release of note