What is expected from the ECB meeting and Draghi’s speech

On Thursday, January 25, the result of the January seizure of the European Central Bank will be published, followed by a speech by ECB head M. Draghi. This event remains a key event of the current week, not only because it is a meeting of a large world bank, but also because the market expects hints of a change in the ECB’s monetary policy.

Against the backdrop of the economic growth of the eurozone, the text of the ECB protocol can be very optimistic, which can be expressed by indicators of economic growth and a further increase in forecasts. As a result, the euro will receive support. Also, the market will expect hints of a decline in the volume of the quantitative easing program (QE), which will also have a positive impact on the single currency.

After the publication of the ECB protocol, M. Draghi will make a speech. The comments on monetary policy, incentive program and the current euro exchange rate are expected. Comments on maintaining interest rates at the same level will be restrainedly negative. But they will not exert significant pressure on the euro, as the market does not expect the possibility of tightening monetary policy in the near future. The reduction in the volume of the incentive program will be seen as a very positive signal, but unlikely it will happen. The main negative factor in the speech may be Draghi’s comments on the high cost of the euro. As a result, some kind of verbal intervention of the euro is possible.

In any case, the upcoming news from the ECB can have a significant impact on the euro and the market as a whole.

Hanzenko Anton