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European Economics Preview: ECB Policy Decision Due

preview march12 lt

The outcome of the European Central Bank's monetary policy decision is due on Thursday. Markets await more actions from the ECB after the US Federal Reserve and the Bank of England lowered key rates unexpectedly.

The ECB is set to announce the decision of the governing council meeting, in Frankfurt. Policymakers are likely to focus on economic impact of coronavirus after ECB's major counterparts unveiled measures to combat the risks from the covid-19.

The ECB's dilemma is not only that it has basically run out of ammunition but also the fact that there is very little it can actually do to cushion the economic impact from the unprecedented mix of supply-side and demand-side shock, ING economist Carsten Brzeski, said.

The refi rate is currently at a record low 0 percent, the deposit rate at -0.50 percent and the marginal lending rate at 0.25 percent.

The only effective measures the ECB could take would be credit-enhancing measures, the economist noted. The ECB announcement is due at 8.45 am ET.

ECB Chief Christine Lagarde holds the press conference at 9.30 am ET. The publication of the ECB staff macroeconomic projections is also due today.

At 3.00 am ET, January industrial output figures are due from Romania. Production had decreased 0.1 percent on month in December.

At 4.00 am ET, industrial production data is due from the Czech Republic and Hungary. The Czech industrial output is expected to fall 1.5 percent on a yearly basis in January, but slower than the 3.4 percent fall logged in December.

Half an hour later, Statistics Sweden releases consumer prices for February. Economists forecast inflation to remain unchanged at 1.3 percent.

At 5.00 am ET, Eurostat releases euro area industrial production data. Industrial output is expected to rise 1.4 percent on month, reversing a 2.1 percent fall in December.

In the meantime, Italy's quarterly unemployment data is due.

At 7.00 am ET, the Central Statistics Office is scheduled to publish Ireland's consumer prices for February.

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