As if there wasn’t enough fringe developments to keep track of this morning, the ECB decided to interject with its own latest trial balloon (using Reuters this time), with a strategically timed story according to which the ECB rate hike planning might be more advanced than widely thought, and while policymakers are split (and one can easily imagine which ones leaked the “story”) with some expecting the hike in the fall of 2019, others say the hike could come as early as July, months ahead of the market consensus which is currently toward the end of the year:
- ECB POLICYMAKERS SPLIT ON TIMING OF FIRST RATE HIKE, MEANING OF “THROUGH SUMMER”: SOURCES
- OTHERS ECB RATE SETTERS SEE SCOPE FOR MOVE AS EARLY AS JULY AS LANGUAGE VAGUE: SOURCES
Most desks are dismissing the report as just an ECB market positioning test and a way to stop out some of the overly aggressive shorts and/or weak hands, however the news briefly managed to wipe away all EUR losses for the day, and it was up 30 pips from session lows at last check.
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Author: Tyler Durden