EUR – The single currency faltered on Tuesday, after ECB President Lagarde offered no fresh insight into the central bank’s policy outlook while stressing that the central bank was keeping its options open.
Lagarde stated that the ECB would move gradually but with the option to act decisively on any deterioration in medium-term inflation, especially if expectations began to de-anchor.
Commenting on EUR and the ECB, TD Securities notes that “the ECB is in a tough spot because it is expected to see more significant slowing than a lot of its peers. There’s an inherent limitation to how much the ECB is going to be able to do, particularly in the relative sense to, say, the Fed.”
According to Reuters, money markets are pricing in about 238 basis points (bps) of cumulative rate hikes by mid-2023 compared to the around 280 bps they anticipated two weeks ago.
Lagarde stated that the ECB would move gradually but with the option to act decisively on any deterioration in medium-term inflation, especially if expectations began to de-anchor.
Commenting on EUR and the ECB, TD Securities notes that “the ECB is in a tough spot because it is expected to see more significant slowing than a lot of its peers. There’s an inherent limitation to how much the ECB is going to be able to do, particularly in the relative sense to, say, the Fed.”
According to Reuters, money markets are pricing in about 238 basis points (bps) of cumulative rate hikes by mid-2023 compared to the around 280 bps they anticipated two weeks ago.