Home » Nagel dictates the ECB’s hawkish line, the euro soars towards 1.02. Here’s what to expect in the next meeting

Nagel dictates the ECB’s hawkish line, the euro soars towards 1.02. Here’s what to expect in the next meeting

by admin
Nagel dictates the ECB’s hawkish line, the euro soars towards 1.02.  Here’s what to expect in the next meeting

Expectations of an aggressive ECB also in the coming months to raise rates and the drop in the price of gas are driving a new rally of the euro. The cross with the dollar pushed up to 1.0198 this morning with a daily increase of more than one and a half percentage points.

Nagel dictates the hard line

After last week’s 75bp hike, investors are betting on an ECB that is still aggressive in following the Federal Reserve with large interest rate hikes. The Presidente della Bundesbank, Joachim Nagel, signaled support for further interest rate hikes in Europe. “Thursday’s step was a clear sign and if the inflation picture remains the same, clear further steps need to be taken,” Nagel said in an interview yesterday.

Nagel expects a peak inflation in December over 10% and a slowdown during 2023 when it could remain above 6%.

The expectations that the ECB hikes rates by 75 basis points also at its meeting on 27 October. ECB officials see a growing risk of having to raise the key interest rate to 2% or more, at least another 125 basis points up, to curb record inflation in the Eurozone, according to Reuters today. a probable recession.

Money markets value the deposit rate at 1.75% by the end of the year and possibly close to 2.50% next spring.

This week there will be 9 members who will speak (today it will be De Guindos and Schnabel’s turn), and they will be useful to have any confirmations related to the rumors aboutstart of QT discussions published by Bloomberg after the ECB meeting and picked up on Friday by the Financial Times on whether discussions on the issue should start in early October and a decision could be made by the end of the year.

See also  From the new rules on the yield of grapes, the revival of Oltrepò

“Beyond the ECB, there is a lot of focus on what European politicians can do to tackle the energy crisis. EU energy ministers were divided on Friday on some issues, given national interests, ”comments Chris Turner, Global Head of Markets and Regional Head of Research for UK & CEE.

US inflation tomorrow

Looking overseas too, the dollar index today is back by about 1% with all the spotlight on inflation in the United States due out tomorrow and which will give an important signal about the possible orientation of the Fed in the meeting of 20-21 September. US inflation is expected to slow to 8.1% yoy from 8.5% in July, while on a monthly basis the figure could fall by 0.1%, offering the first decline since May 2020. “A a reading that, however, should not make us forget a still historically high value ”, argues Gabriel Debach, market analyst at eToro. Excluding energy and food, expectations are for core inflation to rise 0.3% monthly and 6.1% yoy.

You may also like

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy