Archive - Jun 3, 2015 - Story

After leaving policy unchanged, Mario Draghi takes questions on PSPP effects, bond market volatility, Greece, inflation, and QE flexibility.  

• ECB CUTS ECONOMIC GROWTH FORECAST FOR 2017 TO 2% VS 2.1%
• DRAGHI: ECB KEEPS INFLATION FORECASTS UNCHANGED FOR 2016, 2017

Having fallen for 5 straight months (and missed expectations for the last 4), much to the 'recovery meme' chagrin of Mark Zandi and his fellow extrapolators, May's 201k print (against expectations of 200k) was a modest bounce that will be seen as heralding the post-weather recovery. At 201k, ADP job change remains below every month of 2014 aside from January. Led by small business - which gained 122k of the 201k jobs, we note that large firms 500-999 employees actually saw jobs being shed. Furthermore, Service-providing jobs dominated with 192 of 201k jobs coming from that segment of the economy and just 9k growth in goods producing with manufacturing dropping 5k. Zandi's helpful remarks provide the narrative, "I think the economy is doing much better than the data shows and when it is all revised will show strong growth." Brilliant.

At the post-ECB presser, Mario Draghi will likely discuss volatility in euro bond markets, inflation expectations, Greece, ECB flexibility on PSPP implementation, and the economic outlook for the eurozone. Expect security to be tighter at today's event.

"Greece will not make a June 5 repayment to the International Monetary Fund if there is no prospect of an aid-for-reforms deal with its international creditors soon," Reuters reports. PM Alexis Tsipras will meet with European Commission President Jean-Claude Juncker Wednesday evening, but no deal is expected today.

While there will be far more focus on Mario Draghi's press conference in 45 minutes, where there is no expectation of another glitter bomb this time due to much more stringent press screening measures, the ECB just announced that, as expected, it is keeping it three key rates unchanged.

• Obama signs bill reforming surveillance program (Reuters)
• Tsipras to meet Juncker in Brussels for talks on agreement (AFP)
• Spot the irony: OECD cuts global growth forecast, says recovery taking hold (Reuters)
• The Secret Money Behind Vladimir Putin's War Machine (BBG)
• Companies' Borrowing Spree Darkens Stock Market Future (BBG)
• How OPEC Hurt Big Oil (WSJ)
• What's OPEC Going to Do With Iran's Million Barrels a Day? (BBG)
• Draghi’s Europe Looks Healthiest for Years Despite Greece (BBG)
• Bund yields inch higher, euro holds ahead of ECB (Reuters)

With the Greek IMF payment just 48 hours away, and Europe having submitted its best and final offer to Greece in a battle of "deal proposals", today Greek PM Tsipras will meet with European Commission President Juncker to discuss the recently submitted reform proposals by the Greek premier. However, a Greek government spokesman says that Greek PM Tsipras will not meet Eurogroup's Dijsselbloem despite several reports suggesting that they would do so later today. Last night it was reported that the EU, ECB, IMF agreed on terms for a cash-for-reform plan to be presented to Greece. However, a senior EU official has said that they are concerned that the stringent measures of the proposal could be met with rejection by Greece.