The rate decision is going to be rather straightforward, with the ECB set to cut key policy rates by 25 bps today. So, is there anything else to watch out for as the central bank delivers the same decision for a sixth consecutive time? Let's take a look.
The thing that will be scrutinised heavily from the statement today will of course be this part. The ECB in March tweaked their language on restrictiveness in saying that "monetary policy is becoming meaningfully less restrictive". The previous statement before that said "monetary policy remains restrictive".
That's the key thing to look out for in the statement, in seeing if the ECB has the appetite to switch so hastily to a more neutral stance.
The issue here is that all of this hinges on how Trump's tariffs are going to play out in the weeks/months ahead. And even if not directly regarding trade with the EU, even US-China relations will have a spillover impact. So, that needs to be considered as well.
As such, even with the removal of the phrase "monetary policy is becoming meaningfully less restrictive" it doesn't mean a material change to the ECB's next steps. They still have to take things one meeting at a time considering what's at stake.
Besides that, the only other thing today will be to watch out for Lagarde's press conference. I wouldn't expect too much though as I would wager that Lagarde is going to place a lot of emphasis on this one word: uncertainty. She will likely stress a great deal on that and avoid committing to anything.
No doubt she will be questioned as well on any removal of the above phrase as she said before this that:
"It's not just, you know, an innocuous little change, it's a change that has a certain meaning. We are now moving by having our monetary policy is becoming meaningfully less restrictive to a more evolutionary approach."
There's a slight chance that markets could take all of this to mean a more hawkish stance. But if Lagarde plays her cards right, markets will be left waiting on trade developments in the aftermath - the same as before.
This article was written by Justin Low at www.forexlive.com. Read More Details
Finally We wish PressBee provided you with enough information of ( ECB set to deliver its sixth consecutive 25 bps rate cut, eyes on restrictive language )
Also on site :