ECB preview: A rate hike expected as markets focus on Lagarde, inflation and future policy
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The ECB is fully expected to deliver a 25 bps rate hike this week, which will take the deposit facility rate to 2.50%. At this level, it is roughly the upper end of what most policymakers at the central bank feel that it is neutral. And if not, it borders on policy being mildly r
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The ECB is expected to raise interest rates by 25 basis points today, reaching a deposit facility rate of 2.50%. However, the real focus will be on President Lagarde's signals regarding future rate hikes, amidst mixed expectations from major banks. Per the full note [source], Barclays and Danske Bank believe that Lagarde will keep options open for further action without committing to any explicit guidance. With market attention turning towards inflation and energy prices, any signs of hesitancy from the ECB could shift sentiment in the EUR/USD pair significantly.
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