ECB cuts deposit rate but leaves rest unchanged – ING

By FXStreet FXStreet (Delhi) – Carsten Brzeski, Research Analyst at ING, notes that the first part of Santa Mario’s early Christmas presents is that the ECB just announced a cut in the deposit rate by 10 bp to -0.3, from -0.2%.

Key Quotes

“At the same time, both the refi and the marginal lending facility rate were kept unchanged. This is less of a rate cut than markets and we had expected, probably showing that the hawks at the ECB had more leverage than expected. In the last run-up to the announcement, markets become fragile on the back of some news that the ECB would not have cut at all.”

“That was the ECB’s first part of what we expect to be an early and copious gift giving for the Eurozone. Even though it did not come through a chimney but only with a press announcement. The rate cut shows the ECB’s determination to further weaken the euro exchange rate and thereby supporting economic growth through exports.”

“At 2.30 pm CET, Mario Draghi will start his press conference. Stay tuned to see what else Santa Mario will take out of his bag.”
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Source:: FX Street