Minutes of the March meeting show the Governing Council (GC) becoming more confident that inflation was being brought back under control. However, it was also noted that domestic price pressures were currently still significant despite the real economy undershooting official expectations. The decision to hold policy steady was unanimous and there was no discussion about cutting key interest rates.

Downward revisions to last December's inflation forecasts suggested that policy was working but it was widely believed that further progress was needed to ensure that any cut in interest rates would not be delivered prematurely. Upside inflation risks were seen linked to heightened geopolitical tensions, especially in the Middle East, and, in particular wage growth. With regard to the latter, signs of a slowdown were welcome but pay rates were still high in the context of meeting the inflation target with declining productivity. To this end, more information on the current wage round was seen as very important, particularly in services.

It was noted that the projections for growth and inflation, as well as credit developments, were pointing to a benign outlook, in which both a hard landing and a credit crunch would be avoided. The macroeconomic projections showed an encouraging picture, with an outlook that was well on track to bring inflation back to target. Revisions were becoming smaller, so there was reason to have more confidence in the baseline projections, although the risks to the growth outlook were still tilted to the downside, at least in the short-term. Moreover, the contributions of cyclical and structural factors to growth and longer-term potential were hard to disentangle in real-time. Fiscal policy was also seen as a key driver of economic growth over the projection horizon, in terms of both government consumption and public investment, in particular through the Next Generation EU (NGEU) programme.

In sum, the minutes will do nothing to undermine increasing market speculation about a cut in ECB interest rates at the 6 June meeting. Next week's gathering may be something of a damp squib but investors will be hoping that the tone of both the policy statement and press conference will leave a full-blown ease looking all the more probable.

The European Central Bank (ECB) meets about every six weeks to determine the appropriate stance of monetary policy. The precise details of the policy deliberations are kept secret for thirty years but, since the 22nd January 2015 meeting, summary version of the minutes have been made available around four weeks after the discussions have taken place.

The minutes provide a key insight into what the ECB is focusing upon when setting policy. As such they potentially can have a sizeable impact upon investor sentiment; especially at times when speculation is rife about a possible near-term change in official interest rates and/or non-conventional monetary policy instruments.