The European Central Bank is keeping its feet firmly on the ground and thus leaving all options open. The balance act between combating inflation and supporting the economy is likely to continue into the next round. The ECB is therefore relying on foresight rather than risk-taking. The interest rate pause should not be misinterpreted as a signal of the end of the emergency measures.
DAX chart on a monthly basis
Deposit rate remains at 2.50 percent in the euro area
So the deposit rate, which is crucial for the financial market, remains at 2.50 percent. In the accompanying monetary policy statement it was stated: „The Governing Council is firmly determined to adjust its monetary policy so that inflation stabilizes at the two percent target in the medium term.“ However, the ECB may once again increase the interest rates in December, as it did in September. Back then the Euro-watcher adjusted the key interest rate by 25 basis points and raised the rates for the first time in about three years. Currently the inflation rate in the Eurozone stands at 3.8 percent, well above the target of 2.0 percent.
Core rate for personal consumption spending as high as expected – US GDP stronger
The core rate for personal consumption expenditure was also 0.3 percent, which was as high as expected compared to the previous month.
The GDP growth rate for the US side compared to the previous quarter was 3.4 percent, also higher than expected (3.2 percent, after 2.2 percent previously).
GDP growth rates for Germany and the Eurozone on Friday
On Friday, the agenda will also include the GDP growth rate for the Federal Republic of Germany (10:00 a.m.) and its counterpart for the Eurozone (11:00 a.m.).
The preliminary inflation data for the Federal Republic of Germany must be monitored at 2:00 PM. Economists expect a rate of inflation of 3 percent this time around, after 3.3 percent in October (compared to the same month last year).
