ECB Interest Rate Decision (December 2018)


Posted on: 2018-12-13 (Day) By BCR Market Event


 

The European Central Bank held its key rate at 0% on October’s meeting. Meanwhile, they announced that the monthly pace of the net asset purchases will be reduced to €15 billion until the end of December 2018 and that net purchases will then end. The cash rate expected to remain at 0% as usual.

(Eurozone Interest Rate %)

 

 

ECB Interest Rate Announcement History

Date                                      Previous              Consensus          Actual

13 Dec 2018                        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 2% in November, even though the CPI is below the market expectation and previous reading, acceleration can be found in the inflation figure since April. In the future, 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 Inflation Rate %)

 

Unemployment Rate

A worse-than-expected jobless rate in Eurozone was released at 8.1% in October 2018, same as prior month which is the lowest rate in 10 years. The average wage growth increased from 1.8% to 1.9% in the Q2 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. According to the GDP, a worse-than-expected release of 1.6% showed in the Q3. 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 at December’s meeting.

(Eurozone Unemployment Rate %)

 

(Eurozone Annual GDP Growth %)

 

Technical View

The Euro is weakening against the greenback during this week, the price remains in a tight range between 1.130-1.143. In the 4 hours timeframe, indicators are showing neutral stances for both MACD and RSI, the 50-DMA and 100-DMA are crossing together as well. Focus on 1.130 support level as the pair is showing a downward trend in the chart.  The pair will have a massive decline if it breaks through 1.130 support level.

(EURUSD H4 Chart)