It looks like a non-event: bond markets are not celebrating the ECB's announced 25-point cut to 3.75%.
But it could be a 'one shot': Christine Lagarde rules out the start of a 'cycle' of rate cuts... which seems logical given the rise in inflation forecasts (to 2.5% in 2024 and 2.2% in 2025), which 'is likely to remain close to current levels until the end of the year' as wage growth remains strong and the job market continues to expand.
The ECB will pass its turn in July and will re-examine macro data in September.
All Ch.Lagarde's answers at the press conference were unsurprising, and market expectations (2 or 3 rate cuts in 2024) remain unchanged, with the ECB maintaining its growth forecast at +0.9% in 2024 and +1.4% in 2025.
OAT and Bund yields are up +6pts on the 'fait accompli', at 3.047% and 2.557% respectively, with Italian BTPs adding +5.5pts to 3.832.
The ECB meeting overshadowed retail sales in the eurozone: 'CVS' volume fell by 0.5% according to Eurostat, following rises of 0.7% and 0.6% respectively in March.
In the eurozone, sales of food, beverages and tobacco fell by 0.5% in April, non-food products (excluding motor fuels) by 0.1%, and motor fuels in specialized stores by 2.2%.

Across the Atlantic, US T-Bonds fell by a symbolic +1Pt to 4.296%, and across the curve.

The US "number of the day" remains unchanged: the Labor Department announced that 229,000 new jobless claims were registered in the US in the week to May 27, up by 8,000 on the previous week, which was revised upwards from 219,000 to 221,000.

The four-week moving average - more representative of the underlying trend - came in at 222,250, down an anecdotal 750 on the previous week.




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