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For many market participants, several months of anticipation is about to come to a close on June 5th, but whether it ends satisfyingly or with more uncertainty is a whole other thing.
Expected on Thursday this week is the announcement from the European Central Bank of its plans and measures to alleviate the struggles of the Eurozone. Among these is an exceptionally low inflation rate that could be a negative indicator of a stagnant economy present among many of its 18 member countries. Inflation statistics for May, which are expected to be released before the ECB meeting, are seen to be at just 0.7%, far below the ECB target of just under 2%.
President of the ECB Mario Draghi has called this sub-1% rate to be the danger zone where much of Europe has been at for eight straight months. Draghi has made it clear during their last statement in May that they will be watching for any negative effects spiraling and will enact measures if needed from the lower than expected inflation.
This puts the eurozone's central bank in the spotlight this week as the world awaits its official word on the direction they will take. Speculations have been rampant that among the first to be changed will be Europe's interest rates. Currently set at an all time low of 0.5%, chances are high that the ECB will consider further cuts reaching in to the negative to uplift small and medium enterprises or SMEs if current sentiments are to be believed.
The discussion among members of the Monetary Policy Committee is expected to cover the possibility of cheaper money that financial markets have been expecting.
Also happening on the same day are policy announcements from Britain’s central bank. The Bank of England had attempted printing more money in previous times, a tactic the ECB has commented on before in public.
