Clouds on the horizon will lead the ECB to postpone any change in draft

The threat of a trade war with the US, the result of the Italian elections and still weak inflation in the eurozone will probably make the Governing Council of the European Central Bank (ECB) decide tomorrow significant changes in its monetary policy.

Most analysts consulted by Efe expect, at most, that the bank eliminate from its official statement its reference to the possibility of increasing debt purchases in case the economic situation deteriorates.

However, even this withdrawal of the so-called “easing bias” or “easing bias” is considered unlikely as it could stimulate the current strength of the euro, which today was trading well above $ 1.24.

For experts, the reference to increasing the amount of the stimulus program if necessary has become obsolete, since no one expects the bank to increase its purchases again, but its withdrawal could be interpreted by the market as a movement towards the normalization of monetary policy, which would revalue the euro even more.

A stronger euro can negatively influence eurozone exports and also push down inflation by lowering imports.

At its last meeting on January 25, the Governing Council considered the elimination of the commitment to increase debt acquisitions “premature” and said it was not yet “justified”, although it indicated that its policy of monetary orientation could be reviewed “soon ” this year.

Since then it has been known that inflation in the area in February was 1.2 percent, its lowest level in 14 months and still well away from the target slightly lower than 2 percent pursued by the ECB.

Likewise, the PMI index published by the analysis company IHS Markit – the main indicator of the private economy of the eurozone – reflected this week that the growth of the area moderated in February and that Germany registered its lowest value in three months.

In addition, the decision of the US president, Donald Trump, to impose tariffs on aluminum and steel and the threat to do so also to European cars has unleashed the risk of a trade war that could embarrass the economic recovery of the euro area.