Holzmann Maintains Hawkish Stance

Speaking in Vienna after the cash close, Governing Council member Holzmann sticks to his hawkish guns:

• It’s unclear whether we’re at peak rates yet, can’t exclude further rate hikes
• Upside inflation risks are still out there upside, persistence of underlying inflation very high
• Happy if rates stay high with economy strong
• Our monetary policy is working, but economy could yet surprise on the upside (collating headlines from Bloomberg)

• The remarks are in contrast to Muller earlier today saying he isn’t expecting more rate hikes as things stand.
• As noted earlier before the close, ECB peak hike pricing was little changed, with a 4.05% depo rate seen in December 2023 (implying 5bp of hikes from current levels). With just 2bp priced for October's meeting. the next potential major catalyst for an uprating is the Eurozone September flash inflation data due Thu and Fri