Today the ECB will announce the results of the next meeting, and Mario Draghi will hold a regular press conference. This is the first meeting of the European Central Bank after the referendum on the UK exit from the EU, and it can present some surprises.
Of course, the governing Council will spend considerable time discussing the implications of the withdrawal of Britain from the EU, but the rate this time will not change, experts say, especially because it is unclear when and on what terms Britain will leave the European Union.
However, the fact of the referendum has already had an impact on the economy and financial markets of the Old world. In particular, the single European currency against the dollar has fallen in the area of 1.10.
Most likely, Mario Draghi during his press conference once again will give a hint to the new incentives that can be introduced after the analysis of incoming macroeconomic data. Simply put, to postpone the issue until September, designating certain criteria.
Draghi have said about the negative effect of Brexit, as well as about the need to take action, however trivial extension of the volume of purchase of assets has certain limitations. The fact that the redemption of the ECB includes only those securities that have a yield above the Deposit rate, which now stands at minus 0.4%.
In particular, soon it will not be exposed to the bonds of Germany. Recently, an auction was held, where Germany for the first time in history sold 10-year bonds zero coupon, however, the demand for these securities was so great that the yield went negative.
The bonds were sold with a yield of minus 0.05 percent. In other words, for every 100 euros that investors give to the German government in debt, they have to pay another 5 cents.
It should be noted that the secondary market yield on ten-year securities went to negative territory for quite a long time
We will remind, the volume of asset purchase program the ECB is 1.7 trillion euros.
Well a few days ago held a meeting of the Bank of England and the regulator, contrary to expectations, did not lower the rate and left it unchanged.
Thus, the ECB may follow the example and also leave the decision until September, and that is what betting market participants, as evidenced by the relevant indicators.
It remains to add that the decision regarding the level of rates will be published on the ECB today at 14:45 Moscow time.
The live broadcast of the press conference of ECB President Mario Draghi look on the website “Vesti.Economy” at 15:30 GMT.
