ECB’s Lagarde to make clear case for June cut without explicitly calling for one – TD Securities

Previewing the European Central Bank’s (ECB) April policy meeting, analysts at TD Securities said that they expect a straightforward decision, with the ECB opting for another policy hold.  

“As with the last press statement, we do not expect much to change in terms of language from the Governing Council (GC). As such, the press statement should continue to reiterate the GC’s reaction function, and that policymakers will continue to follow a data dependent approach to policymaking.”

“The main question is what ECB President Christine Lagarde says in the press conference. In terms of signalling for June, we do not believe Lagarde will want to be any clearer that the first cut will likely come in June. At the March press conference, Lagarde came as close as possible to saying that the GC will cut in June without explicitly saying so, and we do not think she will feel the need to utilize any stronger language than this. As such, Lagarde will likely reiterate that the GC wants to see Q1 wage data before deciding when to cut.”