Great Expectations Met

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A week where July 4th falls on hump day usually means no time or incentive for major market disruptions. As long as the country doesn't get blown up (fear of which for some reason is de rigueur for major holidays, and of course the reports of the country getting blown up this July 4th anywhere besides a couple thousand feet from the surface were greatly exaggerated) and nothing major happens abroad, we could quietly pass into the weekend, and probably take a half day Friday.
One of the only scheduled things that could've set the market back was the result of the European Central Bank (ECB) meeting this morning. The ECB wasn't expected to change rates and fortunately upheld that expectation, keeping the deposit rate at 3% and the marginal lending rate at 5%. The ECB has hiked rates 8 times since the end of 2005, and is expected to jack up rates slightly by September.
One of the primary reasons rates held is that June Inflation came in at 1.9%, which meets the targeted rate of 'just below 2,' although inflation fears remain due to credit expansion and volatile oil prices. The current inflation rate is expected to increase in the latter half of the year.
Also expected, the Bank of England (BOE) raised rates a quarter point to 5.75% in attempts to contain inflation and the booming housing market. In the UK, consumer price inflation was 3.1% for the year ending in March, which is the highest inflation level since the BOE could adjust rates. Inflation has subsided somewhat since then, and is getting closer to the 2% target, coming in at 2.5% for the year ending in May.
Bank of England Raises Rates, But ECB Holds Steady [Wall Street Journal]

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