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FxWirePro: What to expect from ECB ahead?

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.

 

 

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2018-12-19 14:48:26
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1.9 %

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5.22 Mln

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-1541 %

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