EUR sees little reaction to ECB Minutes

2:41 PM March 2, 2023

Minutes from the latest  ECB meeting have just been released, however did not cause any major moves on the market as discussions took place 3 weeks ago, followed by the publication of a number of important economic data, therefore views included in the documents are somewhat outdated.

Here are key takeaways from the document:
  • Better than expected growth outlook would contribute to continued inflationary pressures, which were unlikely to abate by themselves without further significant policy tightening.

  • Members agreed that there were no signs of a wage-price spiral, though wage pressures were broadening.

  • To gauge underlying inflationary pressures, markets are now paying more attention to core inflation rather than headline inflation.

  •  It was noted that the short-term momentum in core inflation had also started to decline somewhat.

  •  The underlying situation is not very different from December.

  • Reservations were expressed on the proposed communication of an intention for the March meeting.

  • The recent developments are in line with a `soft landing'.

  • The view was expressed that there continued to be value in frontloading rate hikes at the present stage.

  • Further increases were required for the governing council’s policy rates to enter restrictive territory.

EURUSD is rather unimpressed by ECB Minutes. The pair continues to trade around 1.0620 level. Source: xStation5

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