Market movers today
The most interesting data release today is eurozone inflation in May, which we expect will decline back to this cycle-low of 0.5% y/y from 0.7% y/y in April. German, Italian and Spanish inflation declined in May and these figures even suggest downside risk to our forecast. A lower inflation rate will increase the pressure on the ECB but the decision to ease seems to be more or less a done deal and we still expect the ECB to boost liquidity and introduce a negative deposit rate on Thursday, see ECB research No. 3: Expectations of easing but ECB will surprise the markets , 26 May.
The euro unemployment rate is also released and we expect it to remain 11.8% in April after it peaked at 12.0% in 2013.
The Polish central bank (NBP) will announce its monthly interest rate decision. In line with the consensus expectation we expect the NBP to keep its key policy rate unchanged at 2.50%.
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