ECB Interest Rate Decision (January 2019)


Posted on: 2019-01-21 (Day) By BCR Market Event


 

ECB Interest Rate Decision (January 2019)

The European Central Bank held its key rate at 0% on December’s meeting. Meanwhile, they decided to end the net purchases under the APP in December 2018 and announced that it “intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it starts raising the key ECB interest rates, and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation”. For January’s rate decision meeting, the cash rate expected to remain at 0% as usual.

Eurozone Interest Rate (%)

 

 

ECB Interest Rate Announcement History

 

Date                                      Previous              Consensus          Actual

24 Jan 2019                         0%                        0%         

13 Dec 2018                        0%                        0%                        0%

25 Oct 2018                         0%                        0%                        0%

13 Sep 2018                        0%                        0%                        0%

26 Jul 2018                          0%                        0%                        0%

14 Jun 2018                         0%                        0%                       0%

26 Apr 2018                        0%                        0%                        0%

08 Mar 2018                       0%                        0%                        0%

25 Jan 2018                         0%                        0%                        0%

14 Dec 2017                        0%                        0%                        0%

 

 

Opportunities can be found in the statement

 

Inflation Rate

The annual inflation rate eased to 1.6% in December 2018, unchanged from the preliminary estimate. It was the lowest reading since April. Even though the CPI is below November’s final reading of 1.9%, the ECB aims to maintain the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term.

Eurozone CPI (%)

 

Unemployment Rate

A better-than-expected jobless rate in Eurozone was released at 7.9% in November 2018, this was the lowest rate in 10 years. The average wage growth increased from 2.1 to 2.4% in the Q3 of 2018, the ECB noted the improvements in the labour market were the most important reason why businesses and households had started to spend again.

Eurozone Unemployment Rate (%)

 

GDP

According to the GDP, the Eurozone economy grew 1.6%(YoY) in the Q3 2018, following a 2.2% expansion of final estimate in the previous quarter. The ECB said, there is “still scope for further growth as labour market conditions continue to improve”.  Therefore, the ECB is likely to remain the rate unchanged in January’s meeting.

Eurozone GDP Annual Growth Rate (%)

 

 

Technical View

 

The EURUSD continues declining to a 2-week low, mostly led by the Euro’s self-weakness. In the 4 hours timeframe, indicators are showing bearish stances for both MACD and RSI. The 50-DMA and 100-DMA are narrowing together to show the potential reversal of the long order, the price is also moving below the MA system. Therefore, the price is likely to fall in the short run. Focus on 1.130 support level, the pair will have a massive decline if it breaks through 1.130 support level.

EURUSD H4