The meeting decision today is likely to be a non-event. And if so, the ECB will have done their job well. The central bank won’t be making any changes to key interest rates and the statement language should be left untouched as well. As such, that leaves just ECB president Lagarde’s press conference as the only interesting bit.
So, what can we expect to see from the ECB today and moving forward? Let’s dive into some analyst commentaries ahead of the key risk event later.
Deutsche Bank
– No more rate cuts in 2026
– “It would be wrong to characterise the February meeting as a non-event. The environment is marked by high
uncertainty and two-sided risks. Understanding how the ECB is thinking about risks is important to gauging the
path of policy going forward.”
– “We expect the ECB to remain comfortable with 2% policy rates. The ECB is likely to emphasise an ability to be
patient on the one hand – time and evidence is needed to assess the risk of sufficiently large and persistent
deviations of inflation from target – and nimbleness on the other – the ECB’s willingness to take policy action in
either direction as soon as necessary.”
– “In our baseline, the ECB is on hold at 2% through 2026 and the next move is a hike in mid-2027 driven by fiscal
easing, a tight labour market and future inflation risks moving above target. This year, the risks are skewed
towards further easing.”
ING
– No more rate cuts in 2026
– “We don’t expect any changes from the European Central Bank at next week’s meeting. However, the recent
strengthening of the euro could revive the debate about another rate cut.”
– “… as long as these geopolitical risks and
uncertainties do not translate into substantial changes to the eurozone outlook, the ECB will watch but not act.”
– “The recent euro appreciation will not be a big enough
concern for the ECB to change course next week. For now, the central bank will stay in its good place, and we
don’t expect Lagarde to say anything more on the exchange rate, beyond noting that the ECB will monitor it
closely. However, if the latest trend continues and if the ECB wants to send a signal that a slight undershoot of
inflation is as much a concern as a slight overshoot, the chances of a rate cut in March would clearly increase.”
Commerzbank
– No more rate cuts in 2026
– “At first glance, next week’s ECB monetary policy meeting is likely to be fairly unspectacular. Financial markets
and analysts do not expect any adjustment to interest rates. Hardly any analysts anticipate a change in interest
rates for the rest of the year either.”
– “However, central bankers will have to discuss a number of risks, particularly the implications of the high level of
trade policy uncertainty and the sharp rise in gas prices for the economy and inflation.”
– “Finally, the members of the ECB Governing Council are expected to discuss the spreads between eurozone
bond yields next week. Last year, the spread between French and German government bond yields widened significantly amid political uncertainty in France. However, the yield spread has fallen noticeably since this week, as the French budget is likely
to be passed soon. Although this does not provide for any significant savings, it should at least buy a year of
political stability.”
Nomura
– No more rate cuts in 2026
– “We believe the ECB will continue to emphasise data dependence and a meeting-by-meeting approach, with no
change in its guidance.”
– “ECB President Lagarde is likely to highlight that the ECB is well positioned – with rates currently around neutral – to navigate ongoing uncertainty due to US policy.”
– “Lagarde will likely be asked about EUR/USD following its rise to 1.20, a level above which Guindos
previously said would be “complicated” for the ECB (owing to additional disinflationary pressures). However, we
expect Lagarde to push back and underscore that the ECB does not target the exchange rate, saying the
ECB will look through end-of-forecast horizon deviations from target that are minimal and not persistent.”
Goldman Sachs
– No more rate cuts in 2026
– “Next week’s ECB meeting on February 5 is likely to be uneventful, with the Governing Council leaving rates and
all other policy parameters on hold.”
– “That is because the incoming data have been broadly in line with the staff’s projections, there has been no
significant shift in the economic outlook, and ECB officials continue to see the current policy stance as
appropriate. President Lagarde is therefore likely to reiterate that policy is in a “good place” for the sixth
consecutive meeting.”
– “Looking ahead, our growth and inflation forecasts are similar to the staff projections, and we agree with the
Council’s assessment that monetary policy can stay on hold for the time being. We therefore continue to expect
the policy rate to remain at 2% for the foreseeable future.”
