Euro weakens broadly today even though ECB delivered little news with the rate decision and press conference. The main refinancing rate is kept at 0.00%. Marginal lending facility rate and deposit rate are kept at 0.25% and -0.40% respectively. Also, forward guidance is unchanged. ECB expects to keep key interest rates at present level “at least through the end of 2019”. No detail of the TLTRO III is provided as they will be released at one of the next meetings.
President Mario Draghi’s overtone in the post meeting conference is dovish. He noted that incoming data “confirms slower growth momentum extending into the current year.” “Global headwinds continue to weigh on euro area growth developments”. Also, “persistence of uncertainties, related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets, is leaving marks on economic sentiment.”
Meanwhile, risks surrounding growth outlook remain “tilted t the downside”. They’re “on account of the persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets.” Draghi also urged “other policy areas” to contribute more decisively to raise longer-term growth potential and reducing vulnerabilities. Those include structure reforms and fiscal policies.
