European Central Bank: The interest rate standard has been met and expressed concern about high inflation data.

ECB policymakers expressed concern over the spread of inflation, the minutes of the ECB's April meeting released on Thursday, May 19, showed that the debate appeared to be over how quickly and by how much they should tighten policy. Inflation surged to an all-time high of 7.4%, the European Central Bank confirmed at a meeting its plan to end its bond-buying program in the third quarter, and elsewhere was less clear.

The report showed there was consensus within the ECB's Governing Council that ultra-loose policy must now be reversed, but there was disagreement over how quickly and to what extent the central bank should do so. ECB members are generally concerned about the high inflation data, and the talk of “rising interest rates after a period of time after the end of the bond-buying program” does not prevent timely rate hikes when conditions permit.

Some member countries believe that the stance of monetary policy needs to be adjusted to a neutral stance as soon as possible, and the Governing Council's inflation narrative needs to be revised based on the stated data dependence of monetary policy. The ECB added: There is a view that the criteria for raising interest rates have been clearly met. Against this backdrop, and in line with the Governing Council's commitment to symmetric targeting, the Governing Council should focus on longer-term inflation expectations above target, as it has in the past when inflation expectations were below target.

The ECB will decide at its June 9 meeting to end its bond-buying program around mid-year, and may provide a clear signal at its July meeting from which to start the pace of formal rate hikes. ECB members have generally expressed concern over high inflation data, and talk of raising interest rates sometime after the end of the bond-buying program does not prevent a timely rate hike if conditions permit.

Financial data and events to focus on today:

14:00 UK retail sales monthly rate after seasonal adjustment in April

The next day at 01:00 the total number of oil rigs in the United States for the week of May 20

The next day at 02:30, New York crude oil completed the last trade in June

The next day at 03:30, the US CFTC released the weekly position report