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WELCOME TO ECB WEEK

This week's European Central Bank decision feels especially long-awaited. But the wait is finally over, and money markets are all but certain the central bank will raise rates on Thursday, in what various economists and analysts have described as a "precautionary" or "insurance" hike.

But even though the rate move is widely expected - and therefore likely priced in - there are plenty of other outstanding questions for the ECB that could matter to markets.

Top of that list, of course is, what the central bank might do for the rest of the year, but also how policymakers feel about inflationary pressures, potential second-round effects, and the growth outlook.

"The focus will be more on President Lagarde’s commentary at the subsequent press conference than on the move itself. However, amidst extremely high uncertainty, we believe it is unlikely that she will plot a clear course for the coming months," Bas van Geffen, senior macro strategist at Rabobank, said in a note Monday.

Even if policymakers wanted to, it seems like it might be difficult for them to give markets any clues about what might come next.

"The data currently available is indeed insufficient to assess the magnitude or persistence of the shock from the Middle East conflict, while higher input costs are not being fully passed through to final prices and demand pressure remains weak," Alessia Berardi, head of global macroeconomics at the Amundi Investment Institute, said in a note.

Updated economic projections from the ECB are also due Thursday, and might shed some light on the outlook - but it seems equally likely investors won't get the answers they might be looking for.

(Sophie Kiderlin)

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