Source: European Central Bank
European Central Bank President Christine Lagarde on Wednesday hinted at the scaling back of its bond-buying purchases in the third quarter and tightening of policy soon after. EZU is up 2.02%, while VGK is up 1.53%.
- Lagarde in a speech at an international conference in Slovenia, said the ECB will end purchases early in the third quarter.
- The first-rate hike is seen to follow “some time” after, but the ECB has yet to make a precise definition of the time frame.
- Lagarde noted, however, that this could come in a few weeks, and normalization will be gradual following the first rate hike.
- A growing number of council members have been calling for a 25 basis-point increase in the deposit rate, which is currently at -0.5%.
- The latest speech comes amid the tensions between Russia and Ukraine, along with global inflationary concerns.
- The conflict is seen to boost the green transition as a means to reduce dependency on “hostile actors.”