At 12:45 today the latest Eurozone inflation data will be released, which like the months before is expected to show no change. However, whilst there might not be any movement for the interest rate, President of the European Central Bank, Mario Draghi will deliver a speech that could well move the markets.
Over the last few months there has been speculation with regards to the ECB changing the current fiscal stimulus. The asset buying program is expected to be reduced throughout this year with Mr Draghi expected to provide an indication as to when that may start.
ECB Interest Rate Hike?
The Eurozone currently has a 0% interest rate level and at the moment there appears to be little appetite for any movement from this point. The EU economy has been performing well of late with production and confidence near to recent highs, especially in the main driving economies of Germany and France.
When Mario Draghi speaks today he is likely to mention the recent economic performance but I suspect he will stop short of suggesting the stimulus has completely worked up until this point. This will mean that his comments will have been heard before, but there is always a chance the future may become clearer.
It is worth noting that members of the European Central Bank have in the past suggested the bank are unlikely to offer much guidance moving forwards. Last year the major strengthening of the Euro came off the back of the central bank declaring their appetite for change however the changes didn’t happen. The Euro then strengthened significantly which raised concerns about EU exports, as they become significantly more expensive as a result.
Today Mario Draghi’s speech will be closely watched for clues, however I think that for one of the first times in a while Mr Draghi could actually weaken the Euro.