The fully priced-in rate hike has come and gone, with the ECB raising the benchmark interest rate from 1.25% to 1.50%. Now the question is what happens next: at 8:30 am is the Trichet press conference which we will carry live. Everyone will wonder if this is the end of the hiking cycle, which it almost certainly is as any more hiking will cause a full blown collapse within the PIIGS countries. If so, look for the market to promptly sell the news.
7 July 2011 - Monetary policy decisions
At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:
The interest rate on the main refinancing operations of the Eurosystem will be increased by 25 basis points to 1.50%, starting from the operation to be settled on 13 July 2011.
The interest rate on the marginal lending facility will be increased by 25 basis points to 2.25%, with effect from 13 July 2011.
The interest rate on the deposit facility will be increased by 25 basis points to 0.75%, with effect from 13 July 2011.
The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.