ECB concluded its meeting yesterday with few surprises. The current dovish monetary policy will be maintained, as widely expected, and the inflation target at 2% remains unchanged. Currently, ECB projects that inflation will reach 1.5% by the end of 2023, a considerably long time. This indicates that the EU will have an even longer period of steady or lower interest rate. After the meeting, EUR slid about 0.2% against major counterparts. The market will now turn to the next Fed’s meeting which will be held next week.
Elsewhere on the topic of interest rate, the Bank of Russia will meet today and is expected to lift its interest rate to combat surging inflation. So far in this year, the rate has already been raised by 125 basis points, but the annual inflation is currently at 6.5%, which is much higher than the 4% target.