It is pretty much a placeholder meeting for the ECB as they leave the timeline for APP purchases unchanged i.e. scheduled to end in Q3 while reaffirming that rate hikes will be gradual and will only come after QE ends. But the dovish kicker is more on the subtle change to the forward guidance as the ECB talks up flexibility. I outlined the changes in the earlier post here. In the grand scheme of battling inflation, it isn’t quite needed if the ECB is to eventually deliver on rate hikes. But the fact that they even felt compelled to include this in the statement does say something. If anything else, it offers some hesitation or lack of resolve in pushing for rate hikes. I would argue that is what is causing the euro to drop. That and the fact that kicking the can down the road to June means little chance of a July rate move. EUR/USD is now falling to test its 100-hour moving average @ 1.0872: Break below that and the near-term bias turns more bearish with key support seen closer to 1.0800 and the March low of 1.0806. Lagarde’s presser is the next key thing to watch and we’ll see how much she will want to talk up this supposed flexibility and what exactly does that mean for future policy steps by the central bank.