[ForexNews]

ECB press conference proceeds much as market had expected, consistent with rates being on hold.

As universally expected, the ECB has annnounced that policy rates were unchanged. Today's ECB Press Conference was very much in line with the expectations and suggests that, while there still is a potential downside risk to ECB interest rates during the months ahead should conditions deteriorate anew, overall it seems likely that the ECB will be on hold, in line with market assessment.

Last Wednesday's one year refinancing was praised as an "enormous success," and the Governing Council seems relaxed to have EONIA trading in a range bracketed by the deposit facility (0.25%) and the "main" policy rate (1.0%), evidently considering that the market will be able to drain the surplus liquidity by itself eventually.

There are only subtle changes in the Introductory Statement. The risks concerning the growth and inflation outlook continue to be broadly balanced, (though a new downside risk from higher commodity prices is re-introduced). The Eurosystem staff have evidently nudged up a little the HICP profile for this year, based on the shift higher in energy prices. That said, the statement now describes the growth outlook in H2 as "weak," a slight reinforcement - it seems that recent improvement in business confidence and auto sales is not cutting much ice at the ECB.