What can we expect from next week’s ECB meeting?

by | Mar 4, 2021


“One topic will dominate the ECB meeting and press conference next week: the global bond market sell-off, and what the ECB intends to do about it.

“The average Eurozone 10-year bond yield has risen about 30 basis points since late last year. While this is much smaller than the sell-off in the US, it is an unwelcome development this early in the economic recovery. We’ve already been treated to a barrage of ECB “jawboning” as successive Governing Council members have verbally pushed back against the move in bond yields. Investors should expect more of the same at the ECB press conference – and President Lagarde may go so far as to lay out the next steps the ECB could take to maintain favourable financing conditions, including increasing QE bond purchases.

“Meanwhile, the ECB will also publish its latest staff macroeconomic projections, which will show a sharp run-up in inflation in the very near-term, but a subsequent decline such that the central bank will miss its inflation target in 2022 and 2023. This inflation profile will support the ECB’s accommodative policy stance, and could provide it the cover for further stimulus further down the road. For investors, this means that Eurozone bond yields may remain well-anchored, even if they keep rising in the US.”

Related articles

Argentina devalues peso, slashes public spending

Argentina devalues peso, slashes public spending

(Sharecast News) - Argentina's new hard-right government has devalued its currency by more than half in its first package of economic measures that include slashing public spending. The plans, unveiled by economy minister Luis Caputo in a televised address, also...

OPEC+ agrees to cut output by a further 1m barrels a day

OPEC+ agrees to cut output by a further 1m barrels a day

(Sharecast News) - OPEC+ members have reportedly agreed to cut oil production by a further one million barrels a day. In an online meeting, the cartel of oil producing nations- led by Saudi Arabic - said the production cuts would begin early next year. According to...

Gold and oil prices jump on geopolitical unrest

Gold and oil prices jump on geopolitical unrest

(Sharecast News) - Commodity prices continued to rise on Friday, as tensions escalated across the Middle East. Gold, traditionally seen as a safe haven asset, pushed past $1,980 an ounce, with Comex gold futures adding nearly 1% at $1,980.60, the highest since May....

Trending stories

Join our mailing list

Subscribe to our mailing list to receive regular updates!