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Today European Central Bank (ECB) is to provide further guidance in policy meet. Result to be announced at 12:45 GMT, followed by press conference at 13:30 GMT. Meeting is to be held in Frankfurt, Germany.
Current policy measures–
- Deposit facility rate at -0.40 percent
- Refinancing rate 0.00 percent
- Marginal lending facility rate at 0.25 percent
- ECB had launched four new TLTROs.
- Assets can be bought at yields below the deposit rate.
- In the latest action, ECB tapered asset purchases to €30 billion and extended the program until September 2018.
Expectation today –
- European Central Bank (ECB) is expected to maintain its current policy.
- With ECB announcing clear path until September, no action is likely.
What to watch out for –
- Change in inflation forecast.
- Take on tapering or on the future path of monetary policies.
- ECB’s take on stronger euro.
- The high level of NPLs in European banks, especially in Italy.
- Political trouble in Italy, where populists have won majority of the votes.
- Contingency plans for a looming trade war.
- Contingency plans from the Brexit fallouts.
- What are the major risks for Eurozone in 2018?
- Whether ECB seems comfortable with the level of the Euro or does Drgahi talk the currency down.
Impact –
The euro has remained upbeat despite the European Central Bank (ECB) extending the asset purchase program beyond expectation. The euro is currently trading at 1.238 against the dollar.
