ECB Rate Decision Today

Portugal formally requested EU assistance following a bill auction that showed borrowing costs continue to rise. Prime Minister Socrates said the country needs help to guarantee its financing needs and the Portuguese opposition leader supported the request for aid. No details were announced but EU officials said the request was "responsible" and would be processed quickly. The ECB's policy announcement is due, where the consensus is a 25bp rate hike. At the ECB press conference due 45 minutes after the policy announcement, it is expected from Trichet to announce a series of rate hikes, a claim he has made during previous meetings. However, his other remarks will be closely followed to see if current market expectations of future rate hikes are justified.

AUDUSD hit a new post-float high of 1.0482 after another stronger-than-expected employment report. Employment in March grew by +37.8k (cons. +24.0k), while the unemployment rate unexpectedly fell to 4.9% (prev. 5.0%). This data has fuelled speculation that the next RBA hike will come in August.

Today’s main focus will be BoE rate announcement, followed by the ECB meeting, while the US session will see the release of Canadian Building Permits and US Unemployment Claims.