President Christine Lagarde is expected to face questions about the euro’s strength. Analysts expect her to respond neutrally and avoid signaling any target level for the exchange rate.
An cited in the briefing adds context for the debate. It found that a 10% appreciation in the nominal effective exchange rate reduces euro-area core goods inflation by 0.25 percentage points after one year and cuts headline Harmonised Index of Consumer Prices (HICP) inflation by 0.06 percentage points.
Officials also weigh domestic conditions that remain resilient in the near term. The euro-zone economy grew 0.3% quarter-on-quarter in the fourth quarter of 2025, beating the 0.2% consensus, while the unemployment rate fell to 6.2%.
Growth strength appeared broad-based, with stronger-than-expected outcomes in Germany, Spain, and Italy, while France met expectations. Analysts also pointed to private consumption as a driver, supporting the ECB’s “good place” assessment.
still look mixed across components. Energy base effects are expected to pull headline inflation down to 1.7% year-on-year in 2026’s first quarter, while services inflation remains sticky and inflation expectations have held steady.
The ECB also releases quarterly surveys on bank lending and professional forecasters’ views in the coming week. However, investors expect limited policy guidance until fresh staff projections arrive in March.
For now, the meeting is likely to center on how the euro strength, softer inflation, and steady activity interact. Markets may stay calm if officials keep their stance unchanged and reserve any recalibration for when updated projections arrive.
