ECB President Lagarde started its press conference with with readout of policy statement
Opening statement:
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Open account Try demo Download mobile app Download mobile app- Cited high energy costs and tightening financing conditions as reasons for shallow recession
- Growth is expected to recover as headwinds fade
- Growth expected to be subdued next year
- Price pressures are strong across sectors
- Consumer energy subsidies pull down inflation now but will push it up later
- Wage growth is strengthening
- Inflationary pressures and tighter credit conditions dampen spending and production
- The primary inflation risk is on the upside
- Banks in the eurozone have adequate capital.
- The liquidity requirements of non-banks may amplify market volatility.
Q&A session:
- Expect to hike at 50 bps pace for a period of time
- Quantative Tightening would account for roughly half of all redemptions during that time period.
- Market rate bets don't allow the ECB to reach the 2% goal.
- ECB need to do more on rates than markets have priced
- Had a large majority for the decision.
- Some may have desired to do more or less.
- On actual tactics, not everyone agreed. There was a very broad majority that we should show perseverance.
- Food and energy prices will continue to rise.
- Inflation may be slightly lower in December. Inflation is expected to be high in January and February.
- Anyone who believes the ECB is pivoting is mistaken.
- Given the financing conditions and projected terminal rate, we must continue to fight inflation.
- According to the information, the next meeting will be 50 bps, possibly the next one as well, and possibly the one after that.
EURUSD jumped above 1.07 after Lagarde sais that ECB expects further 50 bp hikes. Source: xStation5
DE30 extends sell-off and is currently testing 200 SMA (red line). Source: xStation5
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