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Update: Europe is losing its early gains after ECB chief Mario Draghi's press conference.
Good morning. Here's what you need to know.
- Asian markets were mostly higher in overnight trading. Europe is rallying on reports that the EU is drafting banking union pillars. U.S. futures are up.
- The ECB left its interest rate unchanged at 1 percent. ECB head Mario Draghi did not announce a renewal of the Securities Markets Programme, another LTRO or coordinated action during his press conference. Follow Draghi's press conference live on BI >
- The EU has a new proposal that could force unsecured creditors of failing banks to take losses, and force lenders to pay levies, as a first step to its banking union.
- German industrial output fell 2.2 percent in April, missing estimates for a 1 percent decline. Meanwhile, Germany auctioned €5 billion of five-year notes at record low yield of 0.41 percent. Now here's a fantastic presentation on why 'Germany is riskier than you think' >
- Australian GDP rose 1.3 percent in the first quarter, beating expectations for a 0.5 percent increase. GDP increased 4.3 percent from a year ago. Dylan Grice warns that Australia's credit bubble is built on an even bigger Chinese credit bubble >
- In industry news, Chesapeake Energy is in talks to sell pipelines to Global Infrastructure Partners for over $4 billion. Meanwhile, India has hired Accenture to bring in up to $10 billion of investments in semiconductor manufacturing.
- Moody's cut the credit ratings of several German banks. The long-term debt and deposit ratings for six banks and one German subsidiary of a foreign group were cut by one notch. Moody's also downgraded two France-owned Greek banks yesterday.
- Euro area Q1 GDP fell 0.1 percent from a year ago, and was unchanged from the previous quarter when it fell 0.3 percent.
- Spanish industrial output plunged 8.3 percent in April, falling the most in over two years. The Bank of Spain expects that the country will slide into a deeper recession as prime minister Rajoy pushes to slash the budget deficit. Don't Miss: 14 reasons Spain is turning into a disaster >
- Nonfarm productivity fell 0.9 percent last month, ten basis points below consensus expectations. Meanwhile, unit labor costs increased 1.3 percent missing expectations of a 2.1 percent gain.
- Bonus - Jennifer Lawrence watched the Queen's Jubilee celebrations with boyfriend Nicholas Hoult on the riverbank near Chelsea Bridge in London.
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- Mario Draghi