• Prior decision
  • Main refinancing rate 1.25% vs 1.25% expected
  • Prior 0.75%
  • Deposit facility rate 0.75% vs 0.50% expected
  • Prior 0.00%
  • Marginal lending facility 1.50%
  • Prior 0.75%

The ECB pretty much delivers on expectations here as they reaffirm that inflation will remain high and above target for an extended period of time. The statement also reaffirms their commitment to raise rates further to try and bring inflation under control, despite the fact that their window to tighten is surely and slowly closing in.

The 75 bps fits with what markets have priced in, so I don’t see much in the decision and statement to get markets too excited about anything. As mentioned earlier here, the euro is likely to continue to struggle on the balance of things. EUR/USD spiked a little on the decision to 1.0029 but is now down to 0.9997 on the day. Over to Lagarde now..