The Barclays Research Team offers a sneak peek at what to expect from Thursday’s European Central Bank (ECB) monetary policy decision due to be announced at 1145 GMT.
Key Quotes:
“On the policy front, at the June meeting the ECB announced the end of net asset purchases starting in January 2019 and provided forward guidance on policy rates by signallng no hikes "at least through the summer" of 2019. Following the announcement, we adjusted our baseline scenario for the ECB and expect the first DFR hike of 15bp in September 2019 followed by a second one of +25bp both in the DFR and the MRO in March 2020. Following the announcement, markets pushed out the pricing for the first 10bp rate hike from June to October 2019.
All the ECB communications since the June meeting, including at the ECB July meeting, have delivered a message consistent with that of the June announcement and have also signaled that the governing council is pleased with the market move and pricing. In sum, no change in the message or the tone is the most likely outcome for the September meeting next week.
Our baseline is for no change in the staff macroeconomic forecast; however, we think that there is a possibility that the ECB June forecast for GDP growth of 2.1% for 2018 will be revised down slightly.
That said, at this point there should be no fundamental reason to make any changes to the 2019 and 2020 forecasts. As for inflation, we do not rule out minor (+/- 0.1pp) adjustments to the headline inflation on the basis of an update of volatile components, such as energy, food or the currency.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD stands firm above 0.6500 with markets bracing for Aussie PPI, US inflation
The Aussie Dollar begins Friday’s Asian session on the right foot against the Greenback after posting gains of 0.33% on Thursday. The AUD/USD advance was sponsored by a United States report showing the economy is growing below estimates while inflation picked up. The pair traded at 0.6518.
EUR/USD mired near 1.0730 after choppy Thursday market session
EUR/USD whipsawed somewhat on Thursday, and the pair is heading into Friday's early session near 1.0730 after a back-and-forth session and complicated US data that vexed rate cut hopes.
Gold soars as US economic woes and inflation fears grip investors
Gold prices advanced modestly during Thursday’s North American session, gaining more than 0.5% following the release of crucial economic data from the United States. GDP figures for the first quarter of 2024 missed estimates, increasing speculation that the US Fed could lower borrowing costs.
Ethereum could remain inside key range as Consensys sues SEC over ETH security status
Ethereum appears to have returned to its consolidating move on Thursday, canceling rally expectations. This comes after Consensys filed a lawsuit against the US SEC and insider sources informing Reuters of the unlikelihood of a spot ETH ETF approval in May.
Bank of Japan expected to keep interest rates on hold after landmark hike
The Bank of Japan is set to leave its short-term rate target unchanged in the range between 0% and 0.1% on Friday, following the conclusion of its two-day monetary policy review meeting for April. The BoJ will announce its decision on Friday at around 3:00 GMT.