- Euro zone inflation hump becoming prolonged
- Market’s assumption of further tightening not unreasonable
- A lot of price pressure in the pipeline but not yet emerged
- Assumes ECB staff projections for inflation will be raised
- EZ recovery flattening; no sign of sudden slowdown
- Rescheduling Greek debt would not help and would create much collateral damage
- ECB still working on facility for dependent banks
Comments from a Reuters interview…
The hawkish comments have EUR/USD firming to fresh session highs at 1.4242 so far. Stops are seen above 1.4250.
