ECB's Knot, re. a hike in July, describes this as a necessity. Hikes beyond July are possible, not a certainty. Could have hit a inflation plateau
- More tightening shifts the balance of risks towards too much.
- 2% 2024 inflation view is optimistic.
Reaction details (08:55)
- Somewhat uncharacteristic commentary from Knot, who is usually a fairly outspoken hawk, and as such a dovish reaction has been seen.
Specifically:
-
Bund Sep'23 lifted from 133.53 to a 133.77 session peak, with the associated 10yr yield moving below 2.40%. -
EUR/USD fell from 1.1260 to 1.1243 - Action which has also been seen in UST Sep'23, rose from 112.28+ to 113.02+ and Gilt Sep'23 to a 95.53 session peak.
18 Jul 2023 - 08:50- Fixed IncomeImportant- Source: Bloomberg TV
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