The European Central Bank rate hike is expected on Thursday 21 July 2022
- announcement is due at 1215 GMT (yes, it's a new time)
- press conference follows at 1245 GMT (ditto)
As a snippet preview, this via Scoita:
- Barring a Fed-style epiphany during its blackout period, the ECB is very likely to stick to its guidance that the first rate hike would be a quarter point lift to all of its rates including the key deposit facility rate presently at -0.5%, the Marginal Lending Facility Rate at 0.25% and the Main Refinancing Rate at 0%.
- Within consensus, there are virtually no forecasters willing to gamble the epiphany route and that’s because of the strong pre-commitment to the move made by President Lagarde. She has bluntly stated “We intend to raise the key ECB interest rates by 25 basis points at our July monetary policy meeting.”
- Because such a move is inconsequential to the inflation fight, the main focus is likely to be upon forward guidance around the next and subsequent moves. Markets are pricing over half a percentage point hike at the next meeting in September and a year-end deposit rate of about 1%
- It may be prudent for the ECB not to pre-commit this time and to retain optionality on the size of the next hike by, among other things, making it conditional upon the assessment of inflationary pressures at that time.
Earlier previews:
- Goldman Sachs preview a rate hike from the European Central Bank
- Newsquawk Week Ahead - Highlights: ECB, BoJ, UK/CA/NZ inflation data, UK debates
- ECB to signal end of an era this week; Expect 25bp but more is not unthinkable - BofA
The ECB should open up a drop under 1 for EUR/USD ....