Market comment

ECB minutes strike hawkish tone

DAVY VIEW

Yesterday’s (October 6th) minutes of the ECB’s September policy meeting struck a hawkish tone. The minutes indicate that the council wants to act forcefully now to avoid increasing rates more sharply in the future. Given the news since the last meeting, that euro area HICP accelerated to 10% in September, the curve now looks too sanguine on rates. Overnight Index Swaps (OIS) imply 75bp and 50bp hikes at the October 27th and December 15th meetings respectively, so the deposit rate finishes 2022 close to 2%.

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Oct 7 2022, 08:05 IST/BST

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