Early ECB Speak Fails To Move Needle

Nothing to really move the needle in this morning’s early rounds of ECB speak, with ECB dated OIS little changed on the day. ~2bp of tightening shows for the next ECB decision, with terminal policy rate pricing showing 6bp of hikes from current levels (come December). Beyond there ~40bp of cuts is priced through September '24.

• Villeroy once again pointed to the need for persistence as opposed to further rate hikes, while touching on the risk of doing too much, once again intimating that he prefers higher for longer at current rate levels, as opposed to further rate hikes.
• Elsewhere, de Cos pointed to the need for restrictive fiscal policy in ’24, echoing recent comments from fellow dove Stournaras, while highlighting the need to keep rates at current levels for “long enough.”
• Finally, BBG recently ran headlines covering our interview with ECB’s Kazaks, published last Thursday.