The report on the US labor market in the private sector from ADP was unexpectedly weak in May. The growth of new jobs in May amounted to only 27 thousand against the forecasts of 185 thousand and this is the worst figure in more than 9 years.

Growth has traditionally been observed only in the services sector and fall again in the construction industry. Before the publication of official data on the labor market on Friday, players received an unexpected and very unpleasant guideline, which could mark the beginning of a break in the entire monetary policy of the Fed.

There were no surprises on the ADP report. Markit and ISM have published reports on business activity in the services sector and their results were exactly the opposite. Markit insists on a strong slowdown in PMI, the business activity index was 50.9p. in May against 53.0p. in April, which may indicate a weak growth of the economy as a whole in 2019 given the strong correlation in GDP.

By contrast, ISM reported an increase from 55.5 p to 56.9 p., which is the only reason why stock markets did not collapse on Wednesday. Moreover, we were trading close to the opening levels.

Nevertheless, the respite will most likely be short. The August gold futures are very close to the annual highs and news from the front of the trade war does not give any reason for optimism. Urgent negotiations on trade tariffs in the United States and Mexico yielded no results. On Wednesday, after Powell, the Fed's readiness to support economic growth was announced by board member Lael Brainard, which signifies a clear signal to the markets about the transition to the dollar weakening phase.

Preliminary data on inflation in the eurozone in May turned out to be noticeably worse than expectations, which is likely to have a strong influence on the outcome of the ECB meeting. Inflation rose by only 1.2% versus 1.7% in April despite the slowdown in price increases in the services sector, which are usually considered a good guide for price trends in general.

The dynamics are really negative. Prices rose by 1.57% in January, 1.36% in February, 1.14% in March, 1.93% in April and 1.07% in May. The May decline is partly due to the celebration of Easter but even with this amendment, the trend is negative.

On Wednesday, a number of related indicators were published and they also do not give any reason for optimism. The results of various data are as follows: Producer prices decreased by 0.3% in April, annual growth slowed from 2.9% to 2.6%, retail sales also fell by 0.4%, and annual growth rates decreased from 2.0% to 1.5%. There is a slightly positive trend in Markit indices but it can also be explained by a natural increase in activity after a slowdown in April.

In general, the dynamics must be recognized as negative and the ECB will have to react to it somehow. Rising prices for services, which are largely dependent on wages, are not accelerating, even though the economy has overcome the negative trends of 2018 and is slowly recovering as it would seem. The ECB may conclude that wage growth cannot stimulate steady inflation.

Risks for the eurozone economy are growing. It cannot stay away from the negative trends that are caused by the escalation of the trade war between the United States and China. In March, the Fed reoriented markets to one rate increase in the current year and come April, there were doubts about it. Thereafter, markets began to prepare not for growth in May but for a reduction in the rate and two reductions in June. This dynamic will lead to a weaker dollar and the ECB will do everything possible to prevent the euro from strengthening.

It follows that the markets may not be satisfied with the promised specifics on the implementation of the TLTRO3 plan. If in addition to it, something else is not offered but at the same time, it is impossible to expect promises to reduce the rate or resume QE from the ECB.

Thus, if the ECB cannot surprise the market today, the EUR/USD pair will respond with growth to the meeting results. The EUR/USD may rise above 1.13 but Mario Draghi will most likely announce the ECB's readiness for other measures besides TLTRO at a press conference, which will ultimately allow the euro to return to the support of 1.1215 for the day.