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Flash: timid action in the short run, ECB – Merrill Lynch and Bank of America

FXstreet.com (London) - In the view of Merrill Lynch and Bank of America, the ECB has several options to loosen monetary policy further: interest rates, liquidity operations and/or support to credit, but they doubt that it will employ these measures.

Rather, they believe the bank will try to reassure the market that all options remain open and could cut the refi further by 25bp in the summer on the back of weaker activity and to preserve low market rates. They said that the ECB could then follow this with more unconventional policy, should the situation warrant it. For the moment, they believe the ECB’s economic and inflationary forecasts will be revised down marginally at the June meeting (in line with their own projections), vindicating its cautious approach.

Commodities Brief – Precious metals shed recent gains, gold holds above 1400 barrier

Gold extended its rally towards the first upside target at 1420.00-resistance level, which effectively capped a prolonged rally for now. A clear break above 1420.00 however, will confirm further upside towards the full upside target at around 1445.00 area. Overall, settling back above 1400.00 favors further upside over the short-term. At the time of writing, the yellow metal has settled at USD $1411.00 per oz. during European trading.
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Flash: US nearing end of improving layoff side of hiring-firing equation - DBS Group

DBS Group analysts believe that recent Jobless claims numbers indicate that the US is nearing the end of the line for improvements on the layoffside of the hiring-firing equation.
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