MNI BRIEF: ECB Points To Possible Rate Cut In June

The European Central Bank pointed to a possible rate cut in June, but left its key rates unchanged after its meeting on Thursday, keeping the deposit rate at 4.0%, with the MLF and refi rate at 4.75% and 4.5% respectively. (See MNI ECB WATCH: ECB Likely To Point To June Cut)

“If the Governing Council’s updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission were to further increase its confidence that inflation is converging to the target in a sustained manner, it would be appropriate to reduce the current level of monetary policy restriction,” the ECB said, adding that it would not commit to a pre-determined rate path. (See MNI SOURCES: ECB Still Divided Over Guidance As It Nears Cuts)

The ECB will have access to updated inflation projections when it next meets on June 6, a week ahead of a key Federal Reserve meeting. (See MNI SOURCES: ECB Wary Of Any "Significant Divergence" With Fed)