Upcoming ECB meeting: what to expect?
It’s time for another ECB meeting. Its results will be announced today at 12:45 GMT followed by Mario Draghi’s press conference at 13:30 GMT.
The central bank cut benchmark rate to 0.25% in Nov., but refrained from action in Dec. All 51 economists and analysts surveyed by Bloomberg expect the rate to remain unchanged this time. At the end of Dec. Draghi said that there was “no need for immediate action.”
Note that the euro zone’s inflation slowed last month to a record low of just 0.7%. This reinforces expectations of extremely dovish comments from the ECB this week.
Bank of America Merrill Lynch, however, don’t think that fears of deflation will be the main topic of the meeting. Last month the ECB has fractionally upgraded its growth forecast for the euro area. So far data suggest that the recovery is at least as strong as the central bank projected. The ECB might say that as long as economic developments are in line with its projections monetary policy will not change. So, according to BoA, the market impact of today’s meeting won’t be strong.