ECB Interest Rate Decision Is Coming! European Indices (DAX, CAC40) To Plunge Or Rise? What About Forex Pairs?

Inflation in the US and Great Britain hits high levels and everybody is working hard to handle it. Tightening of monetary policy, hawkish rhetoric and other means are used to tackle one of the most significant problem of today’s world. Today’s news? The US PPI (MoM) hit 1.4% and crude oil inventories didn’t help USOIL to go down. Tomorrow is going to influence European indices as ECB releases its long-awaited interest rate decision. The announcement takes place at 12:45 p.m. tomorrow.

Undoubtedly loose monetary policy has helped DAX, CAC40 and IBEX35 many times before

As we see on the charts ECB was hawkish many years ago. However, the monetary policy has been loosen several times to finally become a “neutral” one. ECB interest rate amounts to 0% right now and the last time the key rate got higher was 2016. Since then DAX (below) has been stimulated by loose monetary policy.

Related article: UK Inflation: The increase has deepened the cost of living crisis in the UK

DAX (GER 40) Has Gained Ca. 180% Over Last 24 years

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Similar dynamics are seen on CAC40 Chart. The Price Was Influenced By COVID-19 significantly

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Taking last ca. 20 years into consideration IBEX35 is the only index of presented which is below-the-line.

Of course, the index was supported by ECB, but unfortunately one of the most popular Spanish index is not able to reach levels from 2008 before the global crisis caused by Lehman Brothers collapse.

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Source and Data: Investing.com, TradingView.com

Charts: Courtesy of TradingView.com