###POV: ECB View: Some caution is likely...>

ECB VIEW: ###POV: ECB View: Some caution is likely required regarding the sharp

EUR and Bund moves following the Nowotny comments. Nowotny has been a long

standing hawk on the ECB, and has been calling for an early start to the winding

down of the stimulus programme for some time. His comments today are not

inconsistent with the his previous comments, or indeed, the market consensus.

His comments make clear that a winding down of the bond buying programme (by the

end of the year) would be required first before rate hikes begin. Furthermore,

his comments regarding a staggering of rate hikes, with a move in the deposit

rate first and than a move in the main refinancing rate as a second stage,

almost sound like a concession to the doves.