EUR: ECB speakers and strong currency guide rate debate – Commerzbank

Commerzbank's Rates Strategist Erik Liem highlights upcoming remarks from ECB members Schnabel and Cipollone as markets weigh potential rate cuts. Recent comments from de Guindos, Nagel, Kažimír, Šimkus and Lagarde suggest inflation is broadly on track and Euro appreciation is not yet dramatic, though the Euro keeps testing levels above $1.19 and tariff-related disinflation could justify future easing.

ECB rhetoric versus firm Euro

"In addition to the macro pointers, today's session also features a couple of ECB speakers, with Schnabel and Cipollone scheduled to deliver remarks. The ECB may keep an eye on the possibility of rate cuts, even though the impact from the rising euro has been played down so far. Yet, the euro keeps testing the upside above $1.19 and rate cuts could be justified to offset tariff-induced disinflationary pressures as argued in the latest ECB Blog."

"The inflation trend is in line with the projections. We remain comfortable with the underlying assumptions."

"The latest euro appreciation deserves attention, but is not dramatic at all."

"The inflation situation remains balanced. It would take a major departure from the baseline scenario to change rates."

"We’re monitoring exchange rates, but the appreciation was not something dramatic."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)