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One down, one to go! Now that the RBA has shared its thoughts, all eyes will be on European Central Bank (ECB) Governor Mario Draghi and his gang to see if the recent improvements in growth and inflation have convinced them to shed their dovish feathers.

Here are points you need to know before you trade Thursday’s ECB statement (12:45 pm GMT) and Mario Draghi’s presser (1:30 pm GMT):

What happened last time?

As expected, the ECB maintained its current interest rates and policies in its first meeting this year.

What caught the investors’ attention is how the members took care to downplay the recent rise of consumer prices. For newbies out there, you should know that central banks tend to tighten their policies when consumer prices rise quickly to prevent the economy from overheating.

But in his presser, Draghi specifically said that “there are no convincing signs yet of an upward trend in underlying inflation.” In fact, he and his gang have shared that they’re waiting for four conditions before they consider a rise in inflation as legit. Basically, it must (1) affect medium-term trends, (2) be durable, (3) be self-sustaining, and (4) be widespread.

Draghi was also careful to communicate that the ECB’s decision to scale back the pace of their asset purchases from €80B to €60B in April does NOT mean that they’re tapering.

Draghi assured that he and his team haven’t “discussed high-class problems,” adding that they will “have to have a very deep, very careful discussion and analysis of the situation” when the time comes but that “we are not there.

Last but not the least, the ECB noticeably kept the pedal to the metal by sticking to their mantra that “the Governing Council stands ready to increase the programme in terms of size and/or duration” if outlook becomes less favourable or if financial conditions derail the path to higher inflation. Duhn duhn duhn.

What’s expected this time?

But all those were soooo last month. Since then the Euro Zone’s headline inflation hit the 2.0% mark – a first since 2013 – while its core estimates remained at an annualized rate of 0.9%. If you recall, the ECB has a mandate of “close to, but below 2.0%” inflation.

So, will the ECB bite the bullet this month? Analysts are saying “Nah, not this time.” For one thing, the Dutch and French elections are only weeks away. Not making any policy changes this month not only avoids rocking the boat so close to the events, but also gives the ECB more room in case the results inspire risk aversion in the region.

This doesn’t mean that this month’s policy announcement will be a non-event though! Word around the hood is that the ECB could express its optimism in other ways:

Forward guidance – Since October, the ECB has maintained that it expects its key rates to remain “at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.” Watch out for a removal or change in text to appease some in the Governing Council *cough* Germany *cough* who have long called for scaling back stimulus from the central bank.

Tone of economic and/or inflation projections – The ECB has said that growth outlook risks “remain tilted to the downside” while downplaying faster increases in inflation. Any shifts in tone or recognition that some of the consumer price increases are legit can signal a possible shift in the ECB’s stance.

How might EUR react?

Draghi downplaying the latest inflation increases and emphasizing that he and his friends are nowhere done stimulating the economy took its toll on the euro…for about 15 minutes or so. See, market players soon realized that the statement offered nothing new and proceeded to price in other event risks at the time.
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If the ECB decides to recognize recent improvements in the economy and hint at possibly easing its monetary stimulus after the Dutch and French elections, then the euro could see a bit of boost across the board.

But if Draghi and his friends decide to stick to their guns and continue to push the pedal to the metal, then we might see a similar selloff in the euro before other top tier events (such as the U.S. NFP report) influence the major EUR pairs.