PRIMER: ECB Strategy Review announcement at 12:00BST/07:00EDT and President Lagarde press conference at 13:30BST/08:30EDT

Despite initially being mooted for an unveiling in September, policymakers at the ECB are expected to announce the conclusions of its strategic review today after making progress at a conclave this week. The main focus for the release will be on the expected adjustments to the Bank's current medium-term inflation target of below, but close to 2%. Recent reports have suggested that this target will be raised to 2% with a symmetrical attitude towards undershooting and overshooting the target. This would be perceived as a dovish development compared to its current goal, however, this adjustment has been largely expected by the market and rate hikes are still some way off for the ECB regardless of this policy tweak. As such, the release shouldn't carry too much in the way of a market reaction. Analysts at ING make the distinction between this prospective approach and that of the Fed's flexible average inflation targeting (FAIT) by noting that the latter would involve stating a commitment to make up for past inflation misses whereas the former would stop short of such a commitment. If reports regarding the 2% symmetrical approach are incorrect, ING flags the possibility that policymakers could do away with the ‘below’ in the ‘close but below 2%’ phrasing; such a move would likely be regarded as a disappointment by the market. Asides from the inflation element of the announcement, the review will also likely cover areas such as the Bank's approach to combating climate change, the labour market and the interaction between fiscal and monetary policy. 

08 Jul 2021 - 09:00- Fixed IncomeImportant- Source: Newsquawk