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D(ecision)-Day for the ECB

Published Thursday, June 5th, 2014

The mood across the Eurozone was one of caution with the region’s bourses mostly unchanged as investors readied themselves a day ahead of the crucial ECB policy meeting. Yesterday brought another set of figures which reinforced calls for the ECB to deploy stimulus measures. This time it fell to euro-area GDP growth data which confirmed a slowdown in the economic recovery in 1Q across the region, expanding by just 0.2% against forecasts of 0.4%. The bearish outlook was supported by PMI readings showing that business activity growth across the common-currency bloc eased in May.

Although trading is US stocks was equally as light as it was for its European counterparts, the mood was far more positive despite a slew of mixed data. With the focus on tomorrow’s non-farm payroll report, the markets eagerly awaited the release of the ADP report in order to gauge any potential clues. The outcome was one of disappointment. The ADP reported 170,000 private sector job additions in May, marking the lowest monthly increase since January and missing market expectations.

The bearish flavour continued as figures revealed US 1Q productivity stood at its weakest in six years and its trade deficits widened to a two-year high in April. Nevertheless, investors shrugged off the disappointing news, turning their attention to a survey which revealed an acceleration in service sector growth during May. The broadly upbeat market sentiment sent stocks on Wall St higher with the now customary record close on the S&P500.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.