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EUR holds above 1.16 ahead of a neutral ECB
Among a phalanx of central bank meetings this week, the ECB gather tomorrow with no policy changes forecast. Since the last meeting in September, global energy prices have surged, adding upside risks to the inflation outlook. At present, markets are pricing most of a 10bps rate rise by next summer. President Lagarde is widely expected to push back on this pricing for rate hikes, in line with recent comments from the ECB’s chief economist Lane. Expect to hear talk about base effects, transitory drivers and slack. That said, the battle between the ECB hawks and doves is raging at present. This means Lagarde will ... (full story)