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EUR & ECB crib sheet: Forced patience leaves the euro vulnerable
Only a few weeks ago, a hawkish shift by the ECB at the March meeting appeared almost certain, and this notion had boosted some idiosyncratic EUR strength as markets gambled heavily on the start of the tightening cycle this summer. The conflict in Ukraine – and the consequences for energy prices – have clouded the economic outlook for the eurozone, and materially increased the probability that the ECB will strike a more cautious tone than previously anticipated. We discuss our expectations for Thursday in our March ECB preview. In a nutshell, we expect the Governing Council to retain maximum flexibility given the ... (full story)