LONDON (Reuters) – The European Central Bank kept borrowing costs on hold on Thursday, repeating that it needed to see more evidence that inflation was heading back to its goal before lowering interest rates further.
The euro held steady at around $1.0931, little changed from levels seen just before the statement. Government bond yields across the euro area remained higher, so did Europe’s broad STOXX 600 share index — last trading around 0.4% higher on the day.
Focus now turns to ECB chief Christine Lagarde’s 1245 GMT news conference.
COMMENTS:
JAN VON GERICH, CHIEF MARKET STRATEGIST, NORDEA, HELSINKI:
“They (ECB policymakers) have been vague about what will happen going forward.
“Their base line is that there will be a cut in September and I think that’s what we’ll see if the data confirms the baseline they set out in June.
“I wouldn’t expect any big signals at the press conference as we have a lot of data ahead of September.”
ARNE PETIMEZAS, SENIOR ANALYST, AFS GROUP, AMSTERDAM
“As expected, the ECB simply repeated its assessment for inflation and growth from the June meeting. Furthermore, they still don’t pre-commit to further rate cuts. However, as we’ve seen with the U.S. CPI release, the writing is on the wall. Inflation is in retreat, and disinflation will resume in the euro zone too. The Fed will cut in September, and I think the ECB will cut too. While during the presser Lagarde is unlikely to guide for a September cut, I think the undertones will. As such, a cut is likely that month.”
(Reporting by the Reuters Markets Team; Compiled by Dhara Ranasinghe; Editing by Amanda Cooper)
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