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ECB: Wunsch and Kazimir Join Holzmann In Hawkish Camp

ECB
BundesbankCentral Bank NewsFixed Income BulletsCEEMEAEurozoneGermanyBulletGlobalEuropean Central BankForeign Exchange BulletsRegionMarkets

National Bank of Belgium Governor Wunsch struck a characteristically hawkish tone in an interview with L’Echo this morning. He noted that the ECB could be taking a risk by accelerating rate cuts “at a time when the trend in energy prices is reversing”, pointing to geopolitical developments in the Middle East.

  • His comments display a similar tone to Bank of Slovakia Governor Kazimir, who was “not completely convinced” the ECB should “make decisions based on one good number”. Meanwhile, Austrian CB Governor was unsurprisingly hawkish on Monday.
  • Hawkish voices warning against an October cut remain firmly in the minority though, and ECB-dated OIS continue to price a ~90% implied probability of a cut through that gathering.
  • The ECB’s September meeting accounts are released tomorrow, but they will be even more stale than usual given the shift in consensus towards an October cut over the past 2/3 weeks, following the weak September flash PMI and inflation data. 
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National Bank of Belgium Governor Wunsch struck a characteristically hawkish tone in an interview with L’Echo this morning. He noted that the ECB could be taking a risk by accelerating rate cuts “at a time when the trend in energy prices is reversing”, pointing to geopolitical developments in the Middle East.

  • His comments display a similar tone to Bank of Slovakia Governor Kazimir, who was “not completely convinced” the ECB should “make decisions based on one good number”. Meanwhile, Austrian CB Governor was unsurprisingly hawkish on Monday.
  • Hawkish voices warning against an October cut remain firmly in the minority though, and ECB-dated OIS continue to price a ~90% implied probability of a cut through that gathering.
  • The ECB’s September meeting accounts are released tomorrow, but they will be even more stale than usual given the shift in consensus towards an October cut over the past 2/3 weeks, following the weak September flash PMI and inflation data.