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FED FUNDS FUTURES

BLOCKs

SHORT-STERLING OPTIONS

Call fly buyer

COPPER TECHS

(U1) Firmer But Still In A Range

CROSS ASSET

Bonds and EUR fade initial post ECB market reaction

US TSYS

Repo Reference Rates

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The ECB press conference begins with Pres Lagarde stressing that the new monetary policy statement is easier to understand and appropriate while capturing all of the elements that markets are used to.

  • Lagarde: Gov Council focused on two topics: First, implications of strategy review for forward guidance on key policy rates. Second, our assessment of the economy and pandemic policy measures.
  • On forward guidance: Forward guidance has been revised to underline a commitment to a persistently accommodative monetary stance to meet the inflation target.
  • On the economic situation: The recovery in the euro area economy is on track. More people are being vaccinated and mobility restrictions have been eased in most EZ countries. The Delta variant constitutes a growing source of uncertainty. Inflation has picked up, but most this increase is likely to be temporary. The medium term inflation outlook remains subdued. Over the pandemic period, favourable financing conditions need to be maintained for all sectors of the economy.