ECB keeps rates on hold in April – as it happened
When will Draghi shift his ‘forward guidance’?
ECB chief Mario Draghi is expected to remain cautious on the eurozone’s growth and inflation outlook this afternoon.
Sandwiched between France’s two presidential election votes, analysts expect Mr Draghi to tread a cautious path and keep the ECB’s “forward guidance” on rates unchanged at today’s meeting, repeating that growth risks remained skewed to the downside.
Instead, ECB watchers are penciling in the bank’s June meeting as the most likely moment the central bank will shift into “neutral” gear. This would include a shift in the current language, removing the need for rates to move “lower” if necessary and cutting back on the time frame for the guidance from the current “extended period of time”.
Marc Chandler at BBH notes:
Draghi is likely to reiterate the consensus judgment that while the growth prospects have improved, based mostly on survey data, prices have yet to find sustainable and independent (of the unorthodox monetary policy) path higher.
Francois Cabau at Barclays adds:
We are not expecting any policy change, but it is likely that the governing council will continue to exchange views on the forward guidance and the sequencing of exit strategies.
At the margin, we do not fully rule out the possibility that the negative bias of the forward guidance on rates is removed