- Governing Council likely to signal no rate cuts for now, but added stimulus and rate cuts in the future.
- Therefore, unlikely that Draghi will preside over any interest rate hikes during his term.
- Euro trading above 1.1150 pre event.
The ECB meets today to determine the interest rate path for the coming months.
It is highly unlikely that they will change the rate since there are few tailwinds to European inflation expectations and still many headwinds to global growth.
It is likely that the situation with Deutsche Bank will be discussed in the press conference after the opening statement.
Weaker than expected Eurozone PMIs were released yesterday which reinforces the idea that a hike most certainly will not be on the cards, and that policy will remain loose going forward.
The market is likely to take any talk of added stimulus as being very dovish so one could expect bond yields and therefore the Euro to face some downside pressure.