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Frankfurt – The European Central Bank is expected to maintain Thursday the course adopted in June of monetary tightening in stages, despite trade tensions that may weigh on the health of the global economy.
Euro Guards meet in the aftermath of talks in Washington between European Commission President Jean-Claude Juncker and US President Donald Trump, which defused the crisis created by US tariffs .
MM. Trump and Juncker have taken a series of decisions in agriculture, industry and energy whose exact scope remains to be confirmed. Mr. Trump spoke of a " big day " for free trade and referred to a " new phase " in relations between Washington and Brussels. " We reached an agreement today ," said Juncker.
Mario Draghi, President of the ECB, is expected to speak Thursday from 12:30 GMT after the meeting of the Board of Governors.
The Italian banker had already insisted in recent months on the risks represented by the bursts of protectionist measures crossed between trading partners, especially since Americans and Europeans have already imposed measures and countermeasures.
Another exit of Donald Trump could also make him react, the American president having described last Friday the Europeans of " enemies ", criticizing their monetary policy which returns, according to him, to manipulate the course from the euro to the detriment of the dollar.
" Mr. Draghi could have some bitter answers, because we know that he is quite sensitive about the independence issues of the central banks and the issues of compliance with the G20's commitments, particularly on the non-manipulation of foreign currencies ", told AFP an observer of the ECB.
– Automatic steering –
Monetary policy side, the custodian institution of the euro should put itself for a moment in " autopilot ," said Dirk Schumacher, an economist at Natixis.
Mr. Draghi is expected to deliver an optimistic but cautious discourse on the economy, without deviating from the planned withdrawal of the extensive economic stimulus announced in June.
For the next few months, the end of the year will see the end of the year of the ECB's mbadive badet purchase program, " QE ". . The monthly pace of this program to support growth will increase from 30 to 15 billion euros in October, before stopping at the end of December.
The ECB will then remain active on the market because it will renew the securities maturing. The stock of some 2.500 billion euros will therefore be maintained in order to avoid an early tightening of financial conditions.
Short-term interest rates should remain at their lowest level " at least " throughout the summer of 2019, a deadline to be specified by the monetary institute in function of the economic situation.
– Little ammunition –
" This means that there is not much conventional ammunition in the ECB's arsenal if a slowdown occurred ", explains Erik Nielsen, economist at Unicredit.
In fact, the uncertainties remain and " the discussion on the sustainability of the recovery " and the acceleration of inflation " will continue " Thursday, provides Carsten Brzeski, economist at ING Diba.
The rate of inflation in the euro zone rose to 2% in June, exceeding even the objective " lower but close to 2% " set by the institution. But rid of energy and food, it fell to 0.9% against 1.1% the previous month, a trend not encouraging.
Finally, it will also be a question of knowing whether the economic growth will start again in the euro zone, after a marked decrease between January and March, to + 0.4% against + 0.7% in the previous quarter.
The latest known indicators for the month of July worry on the one hand, with the slight inflection of activity in industry and trade in the euro zone, according to the Markit cabinet PMI published on Tuesday.
But the very slight decline in the IFO index measuring the morale of German bosses, published Wednesday, suggests " healthy growth to come ". This " will encourage the ECB to maintain an optimistic tone ," said Jennifer McKeown, economist at Capital Economics.
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