–Adds Comments on Inflation Expectations, EONIA Trends
LONDON (MNI) – European Central Bank President Jean-Claude Trichet
signaled further monetary tightening in the months ahead at the ECB’s
regular monthly press conference Thursday.
“We will continue to monitor very closely all developments,” the
ECB chief said.
The comment is normally a signal that rates will be hiked in two
months’ time.
By failing to deploy the “strong vigilance” phrase, Trichet
apparently aimed to signal that the next rate hike would not come in
June, as a growing number of observers had expected.
June Bunds rallied on Trichet’s comments.
Trichet noted that today’s decision was taken unanimously by the
Governing Council. He reminded that the Council never pre-commits itself
on policy moves and can raise rates whenever it deems necessary.
Trichet insisted that inflation expectations in the Eurozone
remained solidly anchored and that the ECB would publish its survey of
forecasters later.
“We have the anchoring of medium-term, longer-term inflation
expectations in line with what we had observed, which means that we had
solid anchoring of inflation expectations,” he said.
Trichet also noted with satisfaction that the volatility of EONIA
had calmed of late in the wake of the central bank’s rate hike in April.
–London newsroom: 0044-207-8627492: email: ukeditorial@marketnews.com
[TOPICS: M$$EC$,MT$$$$,M$X$$$,MGX$$$,M$$CR$]
