DailyFX European Market Wrap: Equities Take a Breather; ECB Signals Steady Hand
European markets are all down today. The main event was ECB interest rate meetings with bank chief Mario Draghi saying that the stimulus package in place is here to stay for now at least.
The bank was relatively dovish as a tone believing risks have been reduced surrounding the French election.
However, they have mentioned that it would be December before they would even consider any cuts. This is supporting the current move for the euro. But overall, Draghi doesn't seem to be confident about his next move due to a number of uncertainties which are in his way.
The overall tone was dovish. Despite economic growth and confidence gains inflation continues to undershoot its target into the fifth straight year. And wage growth is also weak as well as the unknown outcome of the French elections which will be key to deciding any potential future moves and how the Brexit negotiations are proceeding – by the time we get to the next meeting.
The euro was pretty much muted on the news – as it was already priced to some degree – but fell during the ECB press conference.
Donald Trump’s lack of detail in his tax reform proposal received an underwhelmed response from the market.
Lloyds Banking Group has reported a rise in first quarter profit with pre-tax profits doubled from a year ago to £1.3bn in the first three months of the year. Lloyds boss Antonio Horta-Osorio said its "simple and low risk" business was able to cope with difficult trading.
--- Written by Katie Pilbeam, DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.