EUR/USD flows: No big surprises from ECB, bit of sell the fact
ECB initial announcement largely as expected,
Initial bias is minor sell the fact, 1.15~ next down on intraday chart
Nothing hugely surprising in the ECB decision, hiking 25bp as universally expected, and the accompanying statement that focuses on broad range of possible trajectories and on upside inflation and downside growth risk.
From here it says it will closely monitor the situation and follow a data-dependent and meeting-by-meeting approach - that maybe suggests scope at least for a judicious pause to take on more news which might caution on assuming immediate follow up but you shouldn't over-read into the statement that is justifying the current action and stance.
Kneejerk is a modest sell the fact on the announcement as expected given the market was already fully and quite hawkishly positioned. On the intraday chart, the 20 ticks blip down post announcement does make a low and potentially open up down to 1.15~ congestion support test.
There’s more to be digested from the presser and in the details. Growth projections do still seem to skew to the over-optimistic side. Downside growth risks might need to show itself materialising over coming months and quarters to be really altering the ECB’s overall view, though of course the underlying Iran situation and asset market performance around that will be critical for the rest of this year.