Back On The Defensive As Lagarde Pushes Back Against Any Idea Of a Pause

Bund and BTP futures are ticking lower again during the early rounds of ECB President Lagarde’s press conference, initially aided by the much firmer than expected U.S. unit labour cost print for Q1 and resultant weakness in U.S. Tsys. Lagarde has recently pointed to more work to do on the monetary policy front, stressing on a couple of occasions that the ECB isn’t pausing, while noting that today’s decision was “almost unanimous.” The net effect of her ‘assurances’ re: a continuation of the current tightening cycle has added to the aforementioned cheapening impetus, pulling the EGB space further away from post-statement highs. 10-Year BTP-Bund spreads operate within the initial post-statement range, while Bund futures have a look at their post-statement low.