ECB's Lagarde believes the blog post on Monday (see analysis) was at a good time, adding we are clearly at a turning point, via Bloomberg; adds, we are not in a panic mode. When out of negative rates, you can be at or slightly above zero.

Rate Guidance:

• Rates are likely to be positive at end-Q3; when out of negative rates, you can be at or slightly above zero.
• Good reasons to believe that all three conditions (referencing the conditions for a hike) will be satisfied soon.
• Beleives gradualism is the way to go, as long as inflation expectations are anchored. Does not think we are in a situation of surging demand, inflation is still supply-driven.
• We are not behind the curve.

Economic Situation:

• The situation for the EZ is vastly different to the US.
• Looking carefully at all inflation expectations.
• Euro area is not in a recession.

FX:

• Does not comment on FX levels, when questioned about EUR/USD parity.