The euro is trading mixed ahead of the ECB meeting today. The European Central Bank is expected to cut its inflation forecast for 2019. Indeed the CPI should, according to an official European report, fall to 1.5% within the next three years while growth should remain below 2%.
In addition, markets are now waiting for hints about the future of the monetary policy. The massive easing did not yet have the expected results. Concerns are also from German Chancellor Angela Merkel and also from Dutch officials. Recently at the end of a meeting with the Dutch parliament, Draghi was offered a plastic tulip to remind of bubble concern.
Today, the rates are not likely to be changed. The press conference will be widely followed. It should have a positive impact on the single currency as we believe that we are approaching towards an inflexion point regarding monetary policy.
By Peter Rosenstreich