Analysts at Rabobank notes that today’s main event is the ECB policy decision and the Eurozone PMIs have certainly increased the risk that the ECB acts today already.

• “Although the manufacturing PMI indicated that the outlook for this sector continues to weaken, the still okay reading for the services sector should give the Governing Council a little respite.
• Despite another day of record-high temperatures across Europe, we, therefore believe that the Council will be able to keep their cool at today’s meeting: we do not see sufficient reasons for the ECB to accelerate new easing measures and, instead, we are still looking for a series of rate cuts starting in September.
• That leaves today’s meeting to lay the groundwork for these cuts. While the market is already fully pricing in a rate cut by September, the forward guidance still states that key interest rates will stay at present levels until at least mid-2020.
• The ECB can give a nod to the market by changing their forward guidance to include the possibility of lower rates again. Such a change should cement market expectations of easing measures being implemented by September.”