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Danske Bank analysts point out that it is another quiet day in terms of data releases, and hence markets will focus on the implications of the EU vote in different countries.

Key Quotes

“In the UK, both the Labour and Conservative parties are digesting the poor EU elections. Signs from the labour Party of supporting a second referendum will be interesting and the leadership candidates from the conservative party are lining up, with Brexiteers such as Boris Johnson among the favourites, prompting a weakening of GBP.”

“In Italy, EU is rumoured to launch an EDP procedure against the country in early June over the 2018 fiscal outcome , which could prompt reactions from the Italian government.”

“The Hungarian central bank (the MNB) will announce its policy rate decision. We expect that this time the MNB will again leave the rate unchanged at 0.90% despite core inflation climbing to the upper bound of the central bank target on brisk economic growth and double-digit wage expansion. However, it may implement another hike of the overnight depo rate and further cuts in FX swaps as a tool for liquidity tightening.”