Don't forget the European Central Bank interest rate decision today

Asian shares down ahead of Comey, ECB and UK election

USA applications to buy a home reached their highest level in about seven years last week as mortgage rates fell to their lowest levels since late 2016, the Mortgage Bankers Association had said on Wednesday. The report said that the European Central Bank (ECB) is set to cut its medium-term inflation projections for 2019, from 1.7 percent to 1.5 percent.

Aside from the focus on monetary policy, analysts said there was broad relief across financial markets after former FBI director James Comey's testimony on the bureau's investigation into Russia's alleged interference in the 2016 us presidential election revealed little in the way of new details. On Thursday, the bank lowered its forecasts for eurozone inflation this year to 1.5 percent from 1.7 percent, and for next year to 1.3 percent from 1.6 percent. He was notably dovish in a recent appearance at the European Parliament and price rises in the euro zone remain anaemic, with core inflation at 0.9 per cent and the headline rate at 1.4 per cent.

The bank's president, Mario Draghi, was careful not to give a clear signal about when it will start withdrawing stimulus - a measure of the bank's caution about the potential impact such an announcement could have on financial markets. Draghi said there was no discussion of future tapering at the meeting.

This in turn has kept the euro in check this week and it was down 0.15 per cent against the dollar in morning trade in Europe. Earlier Thursday, the Eurostat statistics agency revised figures for first-quarter growth up to 0.6 percent from 0.5 percent. In the year to May it was 1.4 percent and the European Central Bank doesn't expect much change over the coming two years.

Asian shares down ahead of Comey, ECB and UK election

Utilities also rose with RWE and E.ON rose 0.3 and 1.7 percent respectively adding to their rally in the previous session after a nuclear energy tax which penalised them was scrapped.

"Nothing substantial has happened to inflation except the price of oil and the price of food. underlying inflation has remained the same year to year", he noted.

Among other factors making the ECB cautious are big debts overhanging governments and companies, the piles of unpaid loans weighing on banks in countries like Italy and Portugal and political uncertainty ahead of elections in Germany and Italy.

However, the Council reiterated that, if necessary, it stands ready to increase the size of its quantitative easing programme. Confirming as much in the policy statement and/or downgrading the official inflation forecast to show that the Governing Council is looking through the impact of oil fluctuations may weigh heavily on the Euro.




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