ECB meeting today, focus on rates and Lagarde. All updates LIVE

The ECB meeting today, 14 December, is highly anticipated: the last meeting of 2023 promises to be crucial for markets, investors and politicians in the Eurozone.
After the Fed, which left rates unchanged and forecast 75 basis points of cuts in the cost of money for 2024, the spotlight is now all on Lagarde.
His press conference, followed here live from 2.45 pm, should reveal new clues on the path of monetary policy for next year (will there be rate cuts in the Eurozone too?).
Interest rates have increased to the current record level of 4.5% and such a high cost of money is starting to impact credit conditions for businesses, as well as mortgage repayments and consumer demand in general.
In an uncertain economic context for the Eurozone, seen in recession in the last quarter of the year, investors are also awaiting with great interest updates on Eurozone GDP and inflation until 2025.
Furthermore, markets expect new announcements on the ECB's budget reduction.
The end of reinvestments under the Pandemic Emergency Purchase Program (PEPP), which allowed the central bank to buy government debt and inject liquidity, may be brought forward.
With potential consequences on the bond market and, indirectly, on the Italian spread.
Today's ECB meeting is therefore full of meaning and expectations.
Below, live updates from the markets and all the forecasts on the Eurotower meeting and on Lagarde's words in this meeting at the end of 2023.
ECB meeting today: LIVE updates from the markets 12.10pm Italian banks crash on the Ftse Mib the decline in the shares of the main banks stands out: UniCredit -2.84%; Intesa Sanpaolo -0.95% and Banco Bpm -4.91%.
In the prospect of lower interest rates, banks' interest margins may decrease, weighing on institutions' accounts.
11.17 Btp-Bund Spread Pending the ECB decision on interest rates and any indications on the early end of the PEPP bond purchase program, the 10-year Btp-Bund spread is around 172 points 10.08 Euro dollar The pair EUR/USD is trading higher above the 1.0900 threshold.
The exchange rate is supported by broad U.S.
dollar weakness and positive stock market sentiment.
09:10 Opening of European stock markets The European stock markets began the session with gains, in the wake of Wall Street's euphoria after the Fed meeting.
The Milanese Ftse Mib rises by 1.00%, the German Dax increases by 1.30% and the French Cac is up 1.40%.
The Euro Stoxx 50 rises by 1.30%.
read also ECB meeting calendar 2023-2024: all dates ECB meeting 14 December: rate forecasts, also for 2024 The end-of-year meeting should not hold any surprises and most analysts expect rates to remain at 4.5 %.
ECB officials will keep borrowing costs unchanged for a second consecutive meeting and the current level of rates will most likely be maintained until June, when the first of three quarter-point cuts can then be made in 2024, according to economists interviewed by Bloomberg.
ING strategists also underlined that the ECB will almost certainly keep rates unchanged at its December meeting.
“The question is to what extent it will match the market's aggressive bets for rate cuts in 2024.
We suspect it will fail to sustain the ultra-accommodative expectations [that markets are pricing in] anyway.” Investors expect cuts of nearly 150 basis points next year, starting in March.
Economists estimate reductions only in September and December, after June.
ING's analysis highlighted that the ECB is likely to continue its transition towards an accommodative approach at this December meeting, but this will happen at a slower pace than markets are letting on.
“We see tangible risks that the central bank will push back on both aggressive and dovish speculation at this meeting, and that the market may be forced to unwind some of these rate cut bets,” the strategists wrote.
Economists at Deutsche Bank said in a research note published earlier this month that the ECB could bring forward the timing of its first rate cut to April based on the latest inflation data and a more dovish tone of commentary officials.
He added that there is also a “significant risk” of a rate cut as early as March.
Analysts at Pantheon Macroeconomics said that while the consensus now expects the ECB to cut its first rate in June next year, “we continue to believe March is a good bet”.
The spotlight is all on possible clues relating to rates in 2024.
Given that nothing surprising will happen in this last meeting of the year, the prospect of a falling cost of money next year is the real issue of answers.
With the region teetering on the brink of recession, prudence will probably dominate Lagarde's words, as she is unlikely – according to analysts – to anticipate future moves on interest rates.
read also ECB rates will fall to 2.5% in 2024.
Market forecasts ECB economic forecasts: what to expect on GDP and inflation Eurozone inflation is decreasing, but the economy could end the year in a slight recession.
In this uncertain context, the new projections on GDP and consumer prices will be a guide to understanding the economic destiny of the Eurozone in the next two years.
Inflation fell to 2.4% in November, below expectations for the third consecutive month, with the headline index excluding food and energy prices also falling sharply to 3.6%.
In September, the ECB had worsened its estimates compared to the previous ones, with these forecasts: GDP in 2023 at 0.7%, in 2024 at 1.0%, in 2025 at 1.5% and inflation at 5.6 % in 2023, 3.2% in 2024 and 2.1% in 2025.
Bloomberg analysts expect growth and inflation to be revised downwards for this year and next and left unchanged for 2025.
In 2026 Consumer price increases are believed to reach the ECB's 2% target.
Nomura economist Andrzej Szczepaniak expects the new outlook to show inflation slowing to below 2% sooner than currently expected, meaning officials will be unable to be aggressive.
According to Reuters, consumer price projections will also improve.
Analysts largely expect the ECB to reduce its growth and inflation projections for next year from September estimates, reinforcing the need to ease hawkish guidance.
An interesting note is that for the first time the economic estimates will include 2026.
Is the ECB ready to close the PEPP? Lagarde recently said that the ECB would soon discuss ending reinvestments under its €1.7 trillion Pandemic Emergency Purchase Program (PEPP) before the current deadline of the end of 2024.
As such, the December meeting could surprise with new announcements on budget reduction (and on a strengthening of Quantitative Tightening).
Economists including Jari Stehn of Goldman Sachs, Mariano Cena of Barclays and Anatoli Annenkov of Société Générale are among those who predict an acceleration of the ECB's exit from the PEPP, similar to how it kicked off so-called quantitative tightening by canceling its program APP.
It could then be announced on December 14 that reinvestments of redeemed maturing bonds will be reduced starting at the end of the first quarter, with more details on the exit process announced when officials meet in January.
According to a Bloomberg forecast, the ECB would roll over only about half of the proceeds from maturing bonds until June, before stopping reinvestments altogether from July, six months earlier than currently expected.
Such a program would ensure that one of the most important features of the PEPP – flexible reinvestments that allow the ECB to relieve stress in some parts of the eurozone bond market – remains in place during the typical early-year rush by governments to issue debt.
It should be highlighted that the reduction and end of the Central Bank's debt purchases translate into the need for states that issue bonds on the market to find new buyers.
read also The ECB has really finished raising rates, here's why The ECB 2023 The European Central Bank raised the cost of money in 6 meetings out of the 8 scheduled during 2023 (the eighth meeting is in December, not yet held ).
The aggressive monetary policy that began in July 2022 saw a pause in the October meeting, when Lagarde hinted that a high enough threshold in interest rates had probably been reached, so much so that they could be kept steady – potentially for longer – to combat the 'inflation.
With two increases of 50 basis points and four of 25 basis points, the ECB is preparing to close 2023 with a financing cost at a record level of 4.5%.
This year's largely aggressive policy follows what has happened since the summer of 2022.
From July last year to September 2023 there were 10 rate hikes, with a 450 basis point increase.