Looking ahead to the ECB decision
The European Central Bank (ECB) is scheduled to announce its monetary policy decision today at 12:45 GMT and will be followed by the usual post-meeting press conference at 1330. The Central Bank is widely expected to maintain status quo and leave its forward guidance intact that rates will remain at their current levels until after this summer. Usually, if the ECB is hawkish about the inflationary outlook of the economy and raises the interest rates it is positive, (bullish), for the EUR. Likewise, if the ECB has a dove-ish view on the European economy and maintains or reduces the interest rate it is seen as negative, (bearish). With lower growth ahead, the chances of a rate rise in 2019 have all but disappeared already. Brexit will undoubtedly add the pressure on because if the UK leaves without a deal, as the current legal obligations dictate, the astonishing £39bn promised to the EU by the UK Government in return for what very much looks like a big bag of Nothing At All will come off the table. To us, Eurozone growth is likely to be negatively impacted by all of the above.