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The EU countries happen to be some of the most major Forex counties in the world. This shouldn’t come as a surprise, considering the generally-higher income of the local populace as well as higher standards of education, among many factors, which would make it much easier for any willing individual to have a decent shot at the financial market. This popularity of Forex trading has been increasing in popularity for quite some time now, and it doesn’t seem t obe stopping. Due to this, of course, the importance of having a very effective and all-encompassing regulatory environment is even higher.
This is exactly the reason why the EU market is one of the most highly-regulated and secure ones out there. There are many great Forex regulators governing the world’s markets, but the ones from Europe happen to be the very best. Aside from the actual rules, laws, regulations, and restrictions that they impose on the brokers themselves, there are many other additional factors at play which constitute the whole regulatory framework of these regulators.
One such piece of the whole regulatory puzzle is the ECB conference on monetary policy, which itself has a huge effect on the EU monetary policy and its overall economic strategy. In this guide, we will be taking a brief overview of what actual roles ECB has, and in what way, specifically, do the ECB meetings have an effect on the EU markets. After reading this guide, you will have a decent understanding on how this event reflects on the short-term and long-term realities of the Forex trading market, and how you can utilize the information provided to further your trading goals and put yourself in a more favorable position.
ECB monetary policy meeting – a brief overview
Perhaps the central figure that governs, monitors, and manages the monetary and economic environment of the EU is the European Central Bank (ECB). While its spectrum of responsibilities and their definitions are quite broad and diverse, in a nutshell, ECB is there to control and govern how the individual national central banks of the EU countries govern and approach interest rates in their own countries. This means, that ECB is tasked with regulating and controlling the activities of 19 countries that make up the Eurozone. This is quite a responsible and large task, which, by all accounts, ECB manages to fulfill quite well. We will soon learn how exactly, and in what way.
If we were to summarize its goals and aims to one single sentence, it would be the maintenance of stability for these countries’ monetary policies and making sure that the said policies are in alignment with the standards that ECB itself puts forward. As an example, one of the key focuses for ECB is for inflation to be kept under 2%. ECB achieves this by being in charge of and fulfilling, many important obligations, such as:
- Issuance of Euro banknotes
- Maintenance of financial stability in the region
- Supervision major applicable banks in the Eurozone
- Collection and close monitoring of statistical data
- Handling of a broad range of Forex operations
- Creation and implementation of Eurozone’s monetary policy
Needless to say, with such a broad spectrum of responsibilities, the bar is set quite high for ECB, and as such, it’s always hard at work. The ecb 2020 meeting dates are considered to be one of the most important events in the upcoming future, as there, they will be able to focus on what’s important, identify necessary routes of action, and finally come up with a strategy to take action and implement necessary changes.
ECB itself is managed by three separate bodies. The first and most major one is the “Governing Council”, which is, in a nutshell, the main body that has “the final say” in all of ECB’s important policy-making and law-passing endeavors. The second regulatory body in charge of governing ECB is the “Executive Board”, which is in charge of the implementation of monetary policies and the bank’s basic/daily operations. The third and final governmental body in charge of ECB is the “General Council”, which is in charge of managing any and all issues that arise from a country’s transition to the Euro. Naturally, this bod will be dismantled after all the existing EU member states have implemented the Euro.
As you can see, the EU authorities take the performance of ECB quite seriously, lest they wouldn’t dedicate so much time and attention as to provide three separate bodies to govern its activities. Now that we know the extent and specifics of its governance, let’s discuss the actual significance of ECB’s meetings, how the ecb meeting dates 2020 will work, and what are some of the main things to look for in them.
The significance of ECB meetings
The importance of taking into consideration the economic and political events that have a huge impact on the financial markets is known by everyone. This is exactly why many people are sitting in front of their computers all day, scouring the internet for each and every small piece of information that may possibly be of the slightest help. There is definitely nothing wrong with this, and in fact, it’s a great way to increase your chances of profitability, as in the market like Forex, where everything is so dynamic, ever-changing and more importantly, instantaneous, each and every second matters, and has the potential to significantly alter the whole course of your results.
If you are on the same page with us on this, then you will be absolutely delighted to know, that the ECB meeting live updates will provide you with data that would be of equivalent value to you. Why? Because, just like we explained above, the ECB is tasked with some very responsible and serious matters, and as such, every time they conduct their meetings and other important conferences, there is always some subject of very high importance discussed. In fact, these meetings provide you with such vital information, that you can look at it as one of the most major influential factors on the EUR.
Being ahead of the schedule and knowing when these meetings occur is extremely important, as they have a huge effect on the EUR, and during the whole course of these meetings, until the major announcements are made in regards to the ECB’s decisions and plans, the Euro is extremely volatile. This, for the traders who are more concerned with safety and are looking for a safer and calmer trading experience, being aware of these meetings, their schedules, and possible talking points, is very important. On the other hand, if you are one of the traders that thrive in face of volatility rather than avoid it, then it is also important to be up to speed, as the ECB meetings period, as mentioned, ramps up the volatility quite a bit, and as such, it is important to be top of everything during the ECB meeting minutes.
All in all, being in-the-loop when it comes to the ECB meetings is very important, and for anyone who is interested in being in the right place at the right time and taking action at the right time, it’s very important to fully utilize all major information that can be derived from these meetings.
A general overview of ECB meeting 2020
Now that we have a rough idea of the ECB meetings and their significance, let’s discuss in detail what kind of expectations we should have about the 2020 ECB meeting. For one to be best-equipped to make use of the valuable information presented on these meetings, it’s important to be informed in a couple of key aspects that pertain to the meetings, such as what are going to be its main points of discussion, what are the actual dates when they’ll take place, etc.
ECB 2020 meeting schedule
Obviously, due to their huge importance, the ECB meetings are thoroughly planned and scheduled. In general, the meetings are held every six weeks, but the different subjects discussed at these meetings are scheduled at different time frames. The meetings pertaining to the ECB’s main subjects of discussion are held every six weeks, but for everything else, the schedules are much more flexible.
As of this moment, there have been held four meetings following the ECB meeting calendar 2020 so far:
- 23 January
- 12 March
- 30 April
- 4 June
Beyond that, there are four upcoming meetings that are scheduled as follows:
- 16 July
- 10 September
- 29 October
- 10 December
The main talking points of ECB meeting schedule 2020
In general, the main purpose and function of the ECB gatherings are to come up with a suitable strategy and approach in regards to the most important aspects of the EU monetary policy, such as the interest rates and other specific financial policies that have a strong and direct effect on the Euro’s inflation rate. Considering how much importance the EU leaders accrue to the issue of price stability and low inflation rates, ECB meetings are regarded as one of the most important events for the EU financial market. Therefore, making sure that you never miss an ECB conference live stream is extremely important.
As we have already mentioned before, one of the main – if not THE main – goals of ECB meetings is to come up with a suitable, effective strategy to help achieve their target of staying under 2% inflation in the whole Eurozone. It’s precisely for achieving this goal that they come up with certain strategies and courses of action that the National Central Banks then have to follow to achieve the goal. There are three main focuses the ECB has for achieving this goal:
- The minimum bid rate
- The deposit rate
- The marginal lending rate
These are the very policies that are considered to be central in helping ECB achieve its targets, and are supposed to be followed to-a-T by each and every National Central Bank of every country from the Eurozone. Solely based on the fact that these policies will have a major effect on the private/commercial banks of the EU nations, these will have a major effect on the profitability and performance of Forex traders. Let’s now take a deeper look at these specific focuses of interest, and what exactly encompass.
The significance of the minimum bid rate
The minimum bid rate is considered to be one of the most important and significant matters of discussion during the ECB conference press meetings. In a nutshell, the minimum interest rate is what is the minimum possible rate that the National Central Banks are required to charge the commercial banks for the loans that are one-week long, also referred to as the refinancing rate.
The minimum bid rate is considered to be the lowest one of the interest rate caps in the EU countries. Besides regulating the minimum rate at which the private banks borrow money from the National Central Banks, it also controls the interest rates for the credit they loan out. As such, being connected to so many important points of interest at the same time, it is very important for ECB to be very vigilant when it comes to making any corrections to this rate, lest they inadvertently cause a major upheaval of the financial markets.
The significance of the deposit rate
The deposit rate is also a matter of great importance, as it has a major effect on the individual monetary policies of the EU countries. These deposit rates set by the ECB directly influence the rates of overnight deposits with the National Central Banks in the region. Depending on how ECB proceeds, there are many possible outcomes, but there are two main ways things may go, depending on whether the council increases the deposit rate, or decreases it.
In the case of the ECB press conference transcript showing the council increasing the rate, then the commercial banks depositing with the National Central Banks will be getting higher returns on their capital, giving ways to more deposits and an increased amount of loans given out to the clients. In the grand scheme of things, this does reduce the overall supply of money in the economy.
In the alternative case of the council reducing the rate, then the outcome will pretty much be the opposite. The banks will have to work with less interest on the deposits with the National Central Banks, and thus will be giving out loans with less interest, while simultaneously making lesser amounts of deposits. In this scenario, the supply of money will instead be increased.
The significance of the marginal lending rate
The third and final major point of discussion for ECB is the marginal lending rate, which basically represents the rate that the National Central Banks charge for the overnight loans. These overnight loans are usually taken by the private/commercial banks in order to fulfill their daily liquidity requirements for paying out the clients’ money.
Considering the fact that the very reason these loans are taken in the first place is due the emergencies, this means that the commercial banks wouldn’t be able to meet the reserve quotas, and as such, the ECB, as a penalty, would be setting the marginal lending rate higher than what is the minimum bid rate.
How exactly does the ECB governing council meeting affect you?
As you may have realized by now, the ECB is tasked with quite a big and responsible task. Upon their decisions and implementations stands the whole “fate” of the Eurozone’s financial market, as their decisions directly affect the supply of the very money in the regional economy; the money that you will be using to trade on the financial market. Considering this, it should already be a convincing-enough of a rationale for encouraging you to be very involved and interested when it comes to the ECB meetings, and the information provided therein.
Due to all of this, you already probably understand, that this applies and relates to you – the average Forex trader – in a major way. As an example, in the case of the ECB council setting increasing the rates of the National Central Banks, then the amount and quantity of the deposits will definitely increase, as well as decrease the amount of lending, thereby decreasing the supply of money and inflation as well.
If a theoretical ECB meeting today resulted in increasing the rates, the inflation rate of the Euro will be decreasing, thus strengthening it against the US dollar. On the other hand, in case of the interests being decreased, the Euro will become weaker against the dollar. It’s definitely a cause-and-effect arrangement, and considering how fast everything moves on the Forex market, the effect is almost instantaneous, especially with how much importance people accrue to these ECB meetings.
All of this information can prove to be invaluable, depending on your trading strategy and goals. Being able to brace for the upcoming volatility and possibly close your positions in case you want to avoid it, or double down aiming for the higher profits, is an ability that you will soon come to appreciate when utilizing the things like these ECB meetings as a tool because that’s what many traders actually view them as. Any kind of information, especially as significant as the information these ECB meetings provide, is absolutely priceless. So, whenever the ECB next meeting
is about to take place, make sure that you are ready and prepared, as, in this market, there are no opportunities you can afford to let go!
The bottom line
If this guide managed to deliver its message as intended, you will now be fast on your way to marking down the ECB press conference schedule and be on the lookout for the very next one. For the very reasons we discussed above, it should be very easy to see why the ECB meetings are considered to be so important and pivotal for any kind of a Forex trader, whether beginner or a veteran, and whether they’re a small-time trader or if they’re going only for the big game.
As you may already know, any kind of information, no matter how small and seemingly insignificant it may be, has the potential to have huge effects on the financial market. As such, it is a must-do for any committed trader with big goals to make sure that they’re always brushed up on the upcoming ECB press conference dates.
If you are considering being in this in the long run, then you will do yourself a massive favor by instilling a habit of fully utilizing the ECB meetings and the valuable information that they provide to you, as this is no different, and no less of valuable information, as any other major market events that take place and have huge effects on the global financial markets.