As expected, the ECB left unchanged the monthly volume of bond repurchase from the market (80 billion euros) and interest rates in the euro zone (base interest rate at 0% and deposit rate at -0.4%).
After fluctuations within 50 points at the time of release of this news the EUR/USD returned to the previous level near the level 1.1190. At the subsequent press conference head of the ECB Mario Draghi again encouraged the market participants to be patient before seeing tangible results of the ECB's policy, and pledged to keep interest rates at the current or a lower level for a long period. European index StoxxEurope600 increased by less than 0.1%, and EUR/USD by the end of the day declined by about 40 points to close near the level 1.1150. Other European indices also demonstrated weak growth.
It is expected that US unemployment dropped to 4.9% in May compared to 5.0% in April, and Non-Farm Payrolls amounted to 164,000. If the data differs significantly from the forecast, the financial markets will react with serious volatility.
In case the data match or exceed the forecast, the US dollar will strengthen significantly on the currency market, while the market opinion about the possibility of raising interest rates in the United States will grow much stronger. Otherwise, if NFPR falls short of the forecast by about 20 000, the dollar will experience a deep correction. Weak employment data will reduce the probability of the Fed raising interest rates in June.
This should support the US stock indices. The Fed's representative Robert Kaplan said yesterday that an excessively rapid raising of the interest rate could damage the US economy, and the Fed will have to face the inevitable recession.
Since the opening of today's trading day the global stock indices show a very weak dynamics. The dollar is trading almost flat. Investors prefer to refrain from taking action before the publication of key US employment data for May, which will be released at 14:30 (GMT 2).
European indices have also been almost flat since the opening of the European session. EuroStoxx50 traded near the level 3045.0. The weak trading dynamics on the financial markets will apparently continue until 14:30.