ECB leaves rates unchanged as Lagarde announces February exit

Earlier today, the big news came from ECB President Christine Lagarde, who announced she will depart in February.

In April, she told Bloomberg TV: "When there is big clouds on the horizon, the captain does not leave the ship— and this captain is not going to leave the ship, because I see clouds."

It appears, then, that she no longer sees those clouds.

In any case, the key headlines from the decision are as follows:

• The main refinancing rate remains at 2.65%, matching the 2.65% that was expected.
• The deposit rate stands at 2.50%, in line with the 2.50% forecast.
• The marginal lending facility rate is unchanged at 2.90%, as anticipated.
• Energy prices are still moving higher, the ECB stated, pointing to upside risks for the inflation outlook and downside risks for growth.
• Underlying inflation has remained broadly stable so far, and wages have not yet shown a material response.
• The ECB is well placed to navigate uncertainty.
• The ECB is not committing itself in advance to any particular policy path.
• The ECB says it is ready to adjust all of its instruments, within its mandate, to ensure inflation settles at the 2% target.

Traders had priced in a 13% chance of a surprise hike at this month's meeting, but that probability climbs to 65% for December. The euro was 21 pips lower at 1.1131 ahead of the decision, hovering close to the year's lows. The immediate market response to the decision has been minimal.