Daily Wrap Up – 8 June

Today is filled with many important economic and political events that have attracted the attention of the markets over the past few days. As the markets have been keeping an eye on what will happen during this busy day with all these data since the beginning of this week.

The first of these events was the ECB's decision, which kept interest rates unchanged in view of the improved prospects for growth of the Euro-Zone economy, with no indication of future reduction, but as inflation continued to weaken and away from the target, the Bank would increase the incentive program and extend the Quantitative Easing (QE) if needed.

Also, the ECB has lowered its inflation forecast until 2019, with inflation expected to hit 1.5% in 2017, 1.3% in 2018 and 1.6% in 2019 from 1.7%, 1.6% and 1.7% in March respectively.

The ECB's decisions pushed the euro lower against the US dollar, reaching its lowest level since May 31 at 1.1194 before settling near 1.12 levels. The strong support at 1.1190 will be important in determining the direction of the EURUSD in the coming period.

The markets will also keep their eyes on the results of UK's general election, which began this morning, and the initial results will be announced in the early hours of tomorrow. The Conservative Party is now leading in the polls against Labor Party by 5 to 12 points, It is likely that Teresa May, the current prime minister, will have the majority she wants.

James Comey, former director of FBI, has just finished testifying before the Senate Intelligence Committee about Russian efforts to intervene in the recent US elections. In his written testimony, Comey said he was disturbed by US President Donald Trump's request last February to drop the investigation of former national security adviser Michael Flynn over alleged Russian interference in the 2016 presidential election.

Comey reported that he had written notes after meeting Trump in anticipation of any subsequent denial. Comey accused Trump's administration of defaming him by lies, adding that "I don't  think it's for me to say whether the conversation I had with the president was an effort to obstruct". The hearing could have significant implications for the Trump presidency, as markets continued to see that James Comey's testimony would lead to the termination of Trump's presidency.

At the same time, Russia denied the findings of US intelligence agencies announced in January that the Russian president helped Trump win the 2016 elections.