ECB keeps rates unchanged, euro slips
TLT•The ECB left interest rates unchanged and cited rising inflation risks from energy costs, while the euro fell 0.3% to around $1.11. Christine Lagarde resigned as ECB chief, with economists saying her departure adds uncertainty around the bank’s leadership but is not expected to change the near-term rate outlook.
1. Rates held steady
The European Central Bank left interest rates unchanged on Thursday, as expected, and said inflation risks were rising because of surging energy costs. The statement could reinforce market bets on a December rate hike, although tighter financing conditions were also cited as a force weighing on inflation and growth.
2. Euro moves lower
The euro fell 0.3% to around $1.11, its lowest level since last May. Two-year government bond yields declined further, while the STOXX 600 rose 0.95%.
3. Leadership change
ECB chief Christine Lagarde resigned, with economists saying the departure will bring the succession into focus. Several economists said they do not expect the leadership change to alter the near-term rate outlook, though uncertainty remains about how new leadership will communicate with markets.
