Ella 
The European Central Bank (ECB) will announce its July monetary policy decision at 20:15 Beijing time on Thursday. ECB President Christine Lagarde will make a prepared statement on monetary policy and answer questions at a press conference starting at 20:45 Beijing time.
The European Central Bank cut its key interest rate by 25 basis points as scheduled after its June policy meeting. Pursuant to this decision, the main refinancing operations rate, marginal lending facility rate and deposit facility rate were reduced to 4.25%, 4.5% and 3.75% respectively. Rates are widely forecast to remain unchanged after the July policy meeting.
In its June policy statement, the ECB reiterated that it would continue to use a data-dependent and meeting-by-meeting approach to determine the appropriate level and duration of monetary restrictions. Minutes from the meeting showed that some policymakers believed data since the last meeting had not bolstered their confidence that inflation would move closer to the central bank’s 2% target.
Previewing the ECB meeting, Deutsche Bank macro analysts said they expected the Governing Council to leave policy settings unchanged, explaining:
“Our base case remains that the ECB will cut interest rates twice more, by 25 basis points each, in September and December 2024. A September rate cut is not a certainty. Recent data suggests that ECB staff will need to revise upwards recent inflation prospect.
Meanwhile, analysts at TD Securities pointed out that the market will be watching whether the European Central Bank will soften its tone before the possibility of a rate cut in September increases. They expect ECB President Christine Lagarde to remain “vague and noncommittal.”
