- ECB should move decisively towards policy normalisation
- 50 bps in July should be an option if inflation data worsens
- Fragmentation tool should serve as a deterrent
The hawkish murmurs continue for a possible 50 bps rate hike in July but that does not seem to be the base case for now. Besides, with German inflation data today likely to point towards some softening in the annual figures, markets are not likely to chase such a pricing for the time being.
