With inflation soaring, pressure has mounted in recent months on the European Central Bank to finally end its asset purchases and raise rates.
ECB sets course for monetary normalization | Photo credits: IMF Staff Photograph/Stephen Jaffe/CC BY-NC-ND 2.0
Will the European Central Bank (ECB) create a surprise like the Bank of Australia, which raised its interest rates by 50 basis points at the start of the week? It seems unlikely. The monetary institution chaired by the French Christine Lagarde will make its decision at the very beginning of the afternoon. It should confirm the end of its asset purchases in June and announce a rate hike at the July 21 meeting, the first in eleven years. ” The June 9 meeting will mark a real turning point in its monetary policybelieves Franck Dixmier, Global CIO Fixed Income at AllianzGI. Faced with the continuous increase in total inflation to 8.1% in the euro zone, but also in core inflation to 3.8% in May over one year, the ECB is under pressure. This must find an appropriate response, and should be driven by a sense of urgency that has hitherto been almost non-existent in its actions and speeches. In fact, 14 countries have inflation above 8.1%, notably Germany (8.7%). Christine Lagarde should therefore adopt a hawkish tone, and affirm the ECB’s strong determination to fulfill its price stability mandate.. »
FB becomes META
The boss of the ECB should also speak on the extent and pace of the rise in the cost of money: 25 basis points? 50 basis points? ” In their anticipations, the markets have started to reflect the possibility of a step of 50 basis points from July as well as at the end of 2022, and are factoring in an increase at each ECB meeting between now and the end of 2022. end of 2022 “, notes Franck Dixmier again.
In addition to the ECB’s decision, operators will be sensitive to changes in the chinese trade balance in mayat theBanque de France business sentiment index for the same month vices new weekly jobless claims in the USA.
On the value side, the mnemonic for Meta Platforms, the parent company of Facebook, is changing from FB to META. In France, Worldline brings together its shareholders at the annual general meeting.
PC