ECB minutes were released today at 12:30 pm GMT. Document related to October meeting at which rates were kept unchanged. Bank judged that rates are already sufficiently restrictive to push the inflation back to the goal. However, we were offered some hawkish comments from ECB members, signalling that job on inflation is not done yet so there were hopes that maybe ECB minutes will include lines that leave door open for more rates hike.
Release turned out to be slightly dovish. While it was noted in minutes that further hikes may come, it was also noted that economic uncertainty increased and baseline scenario doesn't assume more hikes.
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Create account Try a demo Download mobile app Download mobile appKey takeaways from ECB minutes
- All members agreed with the proposal to maintain interest rates at their current levels
- Expectations were moving from a hump-shaped interest rate path
- Members saw more economic uncertainty than in September
- View was held that all three elements of reaction function were heading in the right direction
- Members argued in favor of keeping the door open for a possible further rate hikes
- Governing Council should be ready, on the basis of an ongoing assessment, for further interest rate hikes if necessary
- It was maintained that, given the current outlook, it could be expected that the governing council would be able to bring inflation back to its 2% target by 2025
- Members agreed with the board's proposal to continue applying flexibility in reinventing redemptions falling due in the PEPP portfolio
- It was generally assumed that the last mile in bringing inflation back to target was the most difficult
- Members saw clear evidence that policy is working as intended
- It was argued that the Governing Council should be careful that its efforts to subdue inflation did not eventually lead to undershooting of the target
- Most of the impact of past hiking had yet to materialize
- A discussion of an early termination of the PEPP reinvestment at the current meeting was seen as premature
- Further rate hikes are not a baseline scenario
EUR moved lower following the release with EURUSD continuing downward move from earlier in the day. Indices saw muted response and are trading little change after 5 minutes following ECB minutes release.
Source: xStation5
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