This afternoon, the European Central Bank (ECB) will announce its latest stance on interest rates and its bond-buying quantitative easing (QE) programme. It’s highly unlikely anything will change, but following last month’s awkward outing for president Mario Draghi, the style will arguably be more important than the substance.
Here’s what to watch out for, when the action kicks off at 12.45pm.
What happened last time
In March, the ECB announced a big bout of extra stimulus, as it sank further into negative interest rate territory, cutting the deposit rate to minus 0.4 per cent. QE was also ramped up from €60bn (£47bn) of bonds a month to €80bn and was extended to include corporate, not just government bonds.
It was more than markets expected, and the euro dropped on the news.
That lasted all but 45 minutes, however, as Draghi took to the stage to declare that he did not think further cuts would be needed. The euro surged, bouncing from $1.08 to $1.12 and ending the day stronger than when it began.
What a mad world. Euro jumps above $1.12, after hit day lows at $1.0822 pic.twitter.com/D2QVLnJAKi— Holger Zschaepitz (@Schuldensuehner) March 10, 2016
This time, the ECB hopes, it will be different.
Send in the dove
“The ECB is unlikely to announce additional stimulus measures following March’s 'kitchen sink' approach,” said Alexandra Russell-Oliver, an analyst at Caxton FX.
“But keep an eye out for any surprises/changes in language, particularly any deviation from the message that current measures should be appropriate to return inflation to target,” she added.
“We expect The ECB to leave its monetary policy unchanged but leave the door open to further easing,” Capital Economics confirmed.
This will be a tricky balance for Draghi to strike, given his perceived missteps last month.
Drop it like Draghi
If the central banker sometimes known as "Super Mario", really wants to tease the markets, he could provide more details on whether the ECB is looking at extreme policy options, such as helicopter money.
Draghi previously said it was an “interesting concept” that the ECB hadn’t looked at in much detail. Don’t expect him to offer up details, but Draghi will certainly be asked about the idea of free money in his press conference which kicks off at 1.30pm.
If he wants to put more than just a dent in the value of the euro - which is bouncing around six-month highs - he could hint that the ECB hasn’t ruled out taking to the skies.
Draghi on the defence
The ECB has come in for a bit of criticism of late. Germany, the powerhouse of the Eurozone, has let it be known that it is not too fond of the ECB’s less than orthodox approach to managing its money.
Draghi is expected to address the concerns of Jens Weidmann, head of the Bundesbank, head on, by reverting to his “whatever it takes” rhetoric, rather than his “we’ve done enough” stance of last March.
The markets are poised and Draghi’s preparing his lines.