Economist's Insights

Comey Testimony Offers No Smoking Gun, ECB Stays Dovish, Hung Parliament in the U.K.

Jun 9, 2017

Treasury yields recovered in the last half of the week after longer yields set new post-election lows on Tuesday. The weekly U.S. economic data was, on balance, weaker than expected. However, the weekly newsreel was weighted heavily towards Thursday events. The ECB’s latest policy decision included no changes to its policy rates or QE program. A reference in the ECB’s Statement to rates potentially moving lower was removed, but ECB President Draghi struck a dovish tone in his presser; expending significant energy stressing the subdued nature of inflation pressures. Former FBI Director Comey’s Senate testimony gave both parties something to cheer – and fret – about, but there was no significant smoking gun. The U.K. parliamentary elections may have been the biggest surprise. Prime Minister May’s Conservative party lost its majority and was forced into a coalition government with the Democratic Unionist Party in an attempt to keep Conservatives in power. The additional uncertainty surrounding the government adds to angst related to Brexit negotiations scheduled to begin June 19. Click here to see the entire recap.