ECB July meeting to be a 'non-event' as tariff deadline nears
|The European Central Bank is expected to hold rates unchanged at its July meeting this Thursday. The meeting itself will probably be largely a non-event, as there will be no updated staff projections, and the communications from President Lagarde will remain as non-committal as possible.
We expect the Governing Council to provide little guidance for the future, instead leaving its options open. With the cutting cycle largely complete, attention turns to the trade war with the US.
Markets are ratcheting up their expectations of the level of tariffs that the US will levy on European goods slowly, as trade talks seem to be making slow progress and we are getting closer to the 1st August deadline.
The July PMIs are expected to once again show sluggish growth, just sufficient to keep the economy near full employment.
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