On Wednesday, French Central Bank Governor, Francois Villeroy de Galhau stated that the ECB may rise interest rates at the earliest through the summer of 2019, which had a slightly different wording than the previous ECB statement of unchanged rates through the summer. In addition, ECB President Mario Draghi has declined to associate the statement to any particular month at his latest press conference. According to Reuters, ECB policymakers are split over the time when a new interest rate rise may occur, where some are seeing an increase in July 2019, while others see autumn as the next target.
Ahead of the NATO summit in Brussels yesterday, European Council President, Donald Tusk reacted to Twitter provocations of US President Trump and advised that America should appreciate its allies as it does not have many. As a reminder, Donald Trump has been criticizing NATO allies over the military investments and has posed threats to cut cooperation with the ones that are not hitting the defense funding target of 2% of GDP by 2024. In his Twitter post on Tuesday, Trump announced his preparation to leave for the NATO meeting and stated that the US is spending much more than any other county for protection, which in his eyes is unfair for the US taxpayer. As a response to the provocation, the European officials stated that it is true that US defense spending makes up to 70% of combined allied military budget, however only 15% of the amount is spent in Europe on NATO related defense. Nevertheless, according to CNN, NATO members are preparing for the worst-case scenario at the summit that has commenced yesterday.
Regarding the macro-economic news, positive results came from the US where the producer prices rose to 0.3%, while the expectancy was 0.2%. The core PPI is a key measure of underlying producer price pressures excluding food and energy costs, and it is closely monitored by the Fed as a leading indicator of inflation. The goods prices raised by the same margin in 4 months, while the motor vehicles prices rose 0.4% in June. The increase in PPI is the highest annual increase in the last six and a half years and in May, the PCE index excluding food and energy managed to hit the 2% target set by the US central bank, for the first time in 6 years.
ECONOMIC CALENDAR EVENTS FOR JULY 12th
EUR German Final CPI m/m
EUR French Final CPI m/m
EUR ECB Monetary Policy Meeting Accounts
GBP BOE Credit Conditions Survey
CAD NHPI m/m
USD CPI m/m
USD Core CPI m/m
USD Unemployment Claims
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