ECB July interest rate setting meeting
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
Last week President of the European Central Bank (ECB) Mario Draghi reported on the ECB’s latest monetary policy committee meeting. Prior to the event the probability of an interest rate hike was at 3.4%. The low probability was anchored by strong forward guidance issued at the last ECB meeting in June. Back then, Mr Draghi confirmed interest rates would remain at historic lows “at least through the summer of 2019”. The ECB also announced an end to its bond purchasing programme, by December this year. However, the central bank said they would continue to reinvest the proceeds of assets which have matured “for an extended period of time”.
Economic data across the European economy has remained resilient since the announcement bringing bond buying to an end. European PMI figures remain well above 50, indicating that the Eurozone economy is still expanding. Furthermore, the Manufacturing PMI figures increased to 55.1, with manufactures shrugging off mounting threats of trade wars between the Eurozone and the US.
At the meeting Draghi gave a more upbeat assessment of the Eurozone recovery noting that the “euro area economy is proceeding along a solid and broad-based growth path” despite the uncertainties which surround “the global trade environment”.
An uneventful meeting, perhaps, but reassuring on growth. Markets where unmoved by the announcements as they matched the expectations of most market participants. The Euro was broadly static against the US dollar.