Release Explanation: It reveals the statistical data that the ECB Governing Board evaluated when making the latest interest rate decision. The report also provides detailed analysis of inflation and current economic conditions.

Trade Desk Thoughts: The ECB releases the data that backs the bank’s decision to cut the interest rate to 1.50%, one week ago. Usually, the market has a weak response to this release, since the data that makes up the bulletin has already been released.

The ECB acknowledged that inflation pressures had further diminished in the last few moths, and now the Governing Council expects some very low CPI rates during the first part of the year. However, according to the bank’s assessment, this trend should reverse by the middle of 2009.

In addition, the outlook for the economic activity clearly lies on the downside now. Both foreign and internal demands are very weak, affecting the Euro-area’s export market, and thus its trade balance. This trend is seen worldwide, and not only in Europe.

Forex Technical Reaction: The euro traded flat in the Asian session, but plunged 120 pips in the early hours of the European session. Eventually, the euro retraced some of the lost ground earlier