ECB’s Knot sees greater risk of them acting too slow rather than too quick in normalising policy

ECB governing council member Knot across the wires  29 March

  • comfortable with market expectations for ending QE in Q4 and rate hike Q2 2019
  • market expectations and ECB view are converging
  • normalisation will be gradual and slow
  • relatively close to sustained adjustment in path of inflation
  • recent euro appreciation not a big concern, it’s mostly due to EZ strong economic performance
  • new ECB guidance should focus on interest rates
  • appropriate to start discussion on new guidance
  • not concerned by softness in recent economic data

Knot seemingly a man in a bit of a hurry but nothing we don’t already know.

EURUSD suitably unfazed at 1.2320 EURGBP 0.8762  EURJPY 131.22

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