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ECB · Euro · Inflation · Interest Rates
ECB officials are reportedly considering an April rate hike if inflation overshoots, leading markets to price in earlier tightening and higher odds of back-to-back moves, which ING analysts believe increases the Euro's upside potential.
ING’s Francesco Pesole highlights that the ECB’s cautious tone masks a hawkish shift. President Christine Lagarde’s press conference conveyed heightened concern for upside risks to inflation.
Bloomberg later reported that ECB officials are already considering a rate hike in April should inflation rise too far above target. Markets now price 15 basis points for an April hike, raising the chances of back-to-back increases.
ING economists are not yet ready to pencil in a rate hike, stating a positive turn in the war and energy prices can still discourage hawks. Further Euro gains depend on no additional major shocks to gas supply.
ING suggests EUR/USD could eye 1.170 soon, backed by a hawkish ECB message, if de-escalation occurs over the weekend.
ECB April Hike Talk Lifts Euro Prospects(current)
