ECB Drops Guidance About Further Rate Cuts

The ECB decided to keep interest rates unchanged, maintaining the refi rate at 0%, the marginal lending facility at 0.25%, and the deposit rate at negative 40 basis points. The focus was on forward guidance, as the ECB removed the reference to potentially lower rates, signaling a shift in policy. The market reacted with a slight positive movement in the euro, but overall, the response was cautious. Expert analysis suggests that the ECB's decision aligns with improving growth numbers, and the market is expected to wait for further clarification from the ECB's press conference.

What was the ECB's decision regarding interest rates in the latest announcement?

• They increased the rates.

• They decreased the rates.

• They kept the rates unchanged.

• They eliminated all rates.

What significant change did the ECB make in their forward guidance?

• They introduced a new bond buying program.

• They removed the reference to potentially lowering rates.

• They announced an immediate rate cut.

• They decided to stop quantitative easing.

What is the ECB's stance on quantitative easing (QE) following the latest announcement?

• They have no plans to change QE.

• They are ready to adjust QE if needed.

• They will increase QE regardless of inflation.

• They will end QE immediately.

How did the market initially react to the ECB's announcements?

• The euro and bond yields remained unchanged.

• The euro and bond yields surged dramatically.

• The euro and bond yields dropped significantly.

• The euro slightly increased, and bond yields stayed negative.

What is a key concern for market analysts despite the positive reaction to the ECB's announcements?

• The immediate end of quantitative easing.

• The extended long euro positions in the speculative market.

• The potential for a sudden rate increase.

• The lack of any forward guidance.