The ECB could be cutting interest rates in June

ECB executive board member, Isabel Schnabel, is of the view that the ECB should follow the Swiss National Bank and the Riksbank of Sweden in starting to cut interest rates. She stated that a June rate cut could be appropriate but not a July one since current data do not support this. The ECB should remain cautious before any additional move beyond June as inflation risks remain tilted to the upside, she said. Other ECB governing council members have issued similar comments about a June cut earlier this week. The market is now pricing 3 interest rate cuts for 2024 as opposed to initially 6. Today, Eurozone yearly core CPI and CPI are due and expected to remain constant at 2.7% and 2.4% respectively. The fibre is currently trading at 1.0857.

Data suggested a contraction of the US economy yesterday as monthly building permits dropped to 1.44 million, housing starts fell to 1.36 million on a monthly basis and 222,000 first-time applications unemployment benefits were registered for the past week. Acknowledging that inflation is dwindling as good news, New York Fed president John Williams stated that it shows that monetary policy is correctly geared and that tight policy should be maintained to guide inflation towards the Fed target range. The Fed line-up for the day include Mary Daly, Neel Kashkari and Christopher Waller. The Baker Hughes oil rig count survey is due today. The greenback was trading at 104.63 against similar majors at the time of writing.