On April 20, the European Central Bank announced its latest interest rate decision, keeping the main refinancing rate unchanged at 4.25%, in line with market expectations. However, in the subsequent press conference, President Christine Lagarde sent a clear dovish signal for the first time, stating that if inflation continues to cool and economic data weaken, “a rate cut at the June meeting could be considered.” The remarks triggered sharp market reactions, with the euro against the U.S. dollar dropping sharply in short-term trading to a near one-month low.

Markets now widely expect the ECB to launch a rate-cut cycle ahead of the Federal Reserve, responding to dual pressures of slowing euro zone growth and falling inflation. Data showed euro zone inflation eased to 2.1% in March, close to the ECB’s 2% target, providing room for monetary policy adjustment. Analysts believe the ECB’s policy shift will have a profound impact on global financial markets. On one hand, rate-cut expectations in the euro zone will widen global monetary policy divergence and drive international capital flows; on the other, ECB easing is expected to boost the euro zone economy and benefit global risk assets. For investors, close attention should be paid to follow-up ECB policy signals and economic data to grasp opportunities brought by the global monetary policy shift.