Bob Mason
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It’s been a quiet start to the day on the Eurozone economic calendar. There were no material stats to provide the EUR with direction ahead of today’s monetary policy decision.


This afternoon, the ECB stood pat on monetary policy, leaving the marginal lending facility and deposit facility unchanged.

Today’s decision was in line with market expectations.

According to the monetary policy statement,

  • The Governing Council expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2%.
  • Until at least March 2022, the Governing Council will continue to conduct net asset purchases under the PEPP. The total envelope of €1,850 will remain until the end of the 1st quarter of next year.
  • Vis-à-vis purchases under the PEPP, the ECB expects purchases to continue to be conducted at a significantly higher pace than during the first months of the year.
  • The envelope can be recalibrated if required to maintain favorable financing conditions.
  • Net purchases under the APP will continue at a monthly pace of €20bn. This is likely to run for as long as necessary to reinforce the accommodative impact of its policy rates and to end shortly before it starts to raise key ECB interest rates.
  • The Governing Council will also continue to provide ample liquidity through its refinancing operations. Funding obtained through TLTRO III plays a crucial role in supporting bank lending to firms and households.

Market Impact

Ahead of the ECB policy decision, the EUR had risen from a pre-release low and current day low $1.20221 to a pre-release high and current day high $1.20591.

In response to the ECB Monetary Policy Statement, the EUR rose to a post-release high $1.20571 before falling to a low $1.20424

At the time of writing, the EUR was up by 0.11% to $1.20479.

Next Up

The ECB press conference, U.S initial jobless claims and, late in the session, flash Eurozone consumer confidence figures.

Expect the press conference to be key…

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