ECB Interest Rate Decision (March 2019)


Posted on: 2019-03-06 (Day) By BCR Market Event


 

The European Central Bank held its key rate at 0% in January’s meeting. Meanwhile, they decided to end the net purchases under the APP in December 2018 and announced that “the key ECB interest rates to remain at their present levels at least through the summer of 2019, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to levels that are below, but close to, 2% over the medium term”. For March’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

07 Mar 2019                       0%                         0%

24 Jan 2019                         0%                         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%

 

 

Opportunities can be found in the statement

 

Inflation Rate (CPI)

The annual inflation rate rose to 1.5% in February 2019 from a 9-month low of 1.4% in the prior month, and slightly higher from the preliminary estimate. Even though the CPI is below the 2% target, 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 7.8% in January 2019, 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 (%)

 

Gross Domestic Product (GDP)

According to the GDP, the Eurozone economy expanded 1.2%(YoY) in the Q4 2018. The ECB said, “while the impact of some of these factors is expected to fade, the near-term growth momentum is likely to be weaker than previously anticipated.”.  Therefore, the ECB is likely to remain the rate unchanged in March’s meeting.

Eurozone GDP Annual Growth Rate (%)​​​​​​​

 

Technical View

The Euro continues declining against the greenback, mostly led by the Euro’s self-weakness. In the 4 hours timeframe, indicators are showing strong bearish momentum for both MACD and RSI. The price is moving below the MA system. Meanwhile, the downward channel is intact to show the pair is remaining in the short order. Focus on 1.1234 support level for further movement.

EURUSD H4​​​​​​​ Chart