ECB Keeps Rates Unchanged for Third Meeting

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Transcript

00:00The ECB decision is rolling out across the Bloomberg terminal.

00:04Let's get over to Bloomberg's Lizzie Burden.

00:06She's in Florence, Italy, this year's choice for the one policy meeting annually held away from the Frankfurt headquarters.

00:12Lizzie, what do we know?

00:15Well, we are expecting a hold here, Matt, from the ECB for a third straight meeting.

00:22And they have said that they are determined to ensure that inflation stabilizes at 2% in the midterm.

00:28Inflation remaining close to the 2% target, as you would expect.

00:33They're sticking to this data-dependent meeting-by-meeting approach.

00:37A hold is what was expected here, given that they've got inflation almost at target.

00:44GDP this morning beating expectations across the euro area economy.

00:49And so this is what they have done.

00:51They've held rates at 2%.

00:53It was unanimously expected by economists, fully priced in by markets.

00:56And indeed, this is what economists expect they are going to do for the next two years.

01:01Despite the trade turmoil, despite the turmoil in French politics, euro area economy in a good place, according to Christine Lagarde.

01:09So I would expect in the press conference that she keeps up with this data-dependent meeting-by-meeting approach.

01:15They're extremely divided on the governing council right now as to what the next move should be when it eventually comes.

01:21There's some saying they need to keep their powder dry in case they need to cut again.

01:25Some saying that they may need to hike.

01:27But in terms of the market reaction, Matt, euro-dollar pretty steady off the back of this.

01:33Weaker 4 tenths of a cent at 1.15.

01:35That's exactly pretty much where it was before the decision.