Financial Information Platform

ECB meeting: Status quo on interest rates!

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Financial markets are made of expectations. For several weeks, it seems that they had fully integrated the status quo to come during the monetary policy meeting of the ECB.

Announcements In Line With Analysts’ Forecasts

At their lowest historical level since the start of the pandemic, the European central bank’s key rates will therefore remain unchanged. A decision was confirmed by the Governing Council at the end of the day’s monetary policy meeting. Thus, the main key rate remains at 0%, despite the high inflation in the eurozone (5.1% over 1 year for January 2021). The ECB, therefore, continues to maintain its more wait-and-see position than the American central bank (FED), which has already announced that inflation on the other side of the Atlantic should no longer be considered as “transitional”. Despite January’s record (5.1% against 5.0% the previous month) and therefore the worsening of inflation, the ECB continues to deliver a positive message, justifying its position:

Inflation continues to be fueled by temporary external factors which could fade over time.

In addition, the European Central Bank has also confirmed the end of its emergency program put in place to counter the effects of the pandemic. To date, this program has totaled more than 1,630 billion euros in assets repurchased for a total envelope which provided for 1,850. The repurchase of assets should therefore cease at the end of March, as had already been mentioned previously. . This emergency program should be followed by the old debt buyback program, i.e. the return to the model used by the ECB upstream of the health crisis. This plan until the end of 2022 will make it possible to continue this policy of buying back securities, but at a lower rate and for lower volumes.

Little Effect On The Markets

In line with forecasts, this announcement, therefore,e had little effect on the financial markets. Thus, the CAC 40 is displayed just above 7,100 points and experiences a loss of 0.15% over the session. Same scenario for the DAX down 0.38% since the opening of the Frankfurt Stock Exchange this morning. In London, the FTSE 100 fell slightly by 0.17%.

The crypto market seems not to have deviated from its trajectory for the day. In a bearish context during the session, the market did not change its course following the announcements. Over the past 24 hours, the Bitcoin price has posted losses of around 4.8%. Same observation for the price of Ethereum and the entire top 100cryptoso. Over the past 24 hours, only the Tezos (XTZ), Quant (QNT) and Immutable X (IMX) projects have posted a gain.

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