The euro strengthened as investors anticipated the European Central Bank's interest rate decision, with expectations of rates held unchanged. ECB officials indicated a cautious approach, emphasizing high thresholds for further cuts due to inflation risks. Sovereign yields increased across the euro area, bolstered by improved risk appetite following a US-Japan deal. However, declining GfK consumer confidence data and weaker German PMI figures may dampen market sentiment, suggesting cautious consumer behavior influenced by global trade tensions could affect growth and prompt a dovish ECB stance.
Expectations that the ECB would hold its interest rates unchanged could also support yields and the euro. In this regard, ECB officials signaled a more cautious stance.
Sovereign yields across the euro area moved higher as risk appetite improved after the US sealed a deal with Japan.
The declining GfK data and softer-than-expected German PMI data could weigh on sentiment, reflecting growing household caution amid global trade tensions.
Isabel Schnabel emphasized that the bar for additional rate cuts remains "very high", warning about potential inflationary effects from tariffs.
Collection
[
|
...
]