President of the ECB Mario Draghi today revealed that the Eurozone interest rate level will remain at 0%. Whilst the decision did not come as a surprise the Euro lost ground against sterling through the course of the afternoon. Draghi did reveal that the ECB have revised the Eurozone growth forecasts up. However he suggested despite good EU data he would not be cutting back the current stimulus measures.
This took the market by surprise as there had been talk of the bond-buying program being reduced, however the current package will continue. Mario Draghi has been under pressure from Germany in particular to increase the interest rate and reduce the stimulus as their economy is booming. However due to the Eurozone having to represent economies like Greece and Italy it would be unlikely a change would happen.
It now seems hard to see when the ECB can actually change the interest rate and that there is more chance of a two tier policy than a hike.
There will be the first of the exit polls being released tonight at 10pm which could provide an early indication as to how the election could unfold. Exit polls in years gone by have not always bene correct however the markets are likely to move on them. In the early hours of tomorrow morning there is likely to be an actual indication as constituencies start to reveal how the public have voted. Throughout the day it’s likely the market will have significant movements.