Global Stocks Bounce After ECB Policy Statement #ECB #FOMC #Inflation

Global stocks bounce after ECB policy statement.  Yesterday, U.S. stock lost ground after the FOMC policy statement.  As expected, the FOMC raised the federal funds rate by 0.25% on a 8-0 vote.  The language coming out of the meeting was a bit more hawkish than expected and the 2018 Dot Plots show that two more rate hikes are expected this year.  Lastly, Fed Chairman Powell stated that beginning next year, the chairman will hold a press conference after every meeting.  In economic data, claims fell to 218K last week, lower than expected.  May retail sales rose more than expected, rising 0.8% m/m and 0.9% ex-auto.  On the inflation front, Import and export prices both rose more than expected in May, rising 0.6%.  Today, futures gained traction after the ECB policy statement.  The ECB announced that policy rates remain unchanged, however, they will reduce bond purchases from the current 30B euro to 15B euro in October and then to zero come January on 2019.  While net new purchases will end, the ECB will continue to reinvest the principal from maturing securities that were purchased under the current asset purchase program.  Asian shares closed lower following the retreat in U.S. equities after the Fed raised rates 0.25%.  In economic data, Chinese industrial production, retail sales and fixed investment were all lower than expectations in May.

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