EUR: Watch for ECB speakers today – ING

The recent shift towards growth concern in the ECB narrative automatically places a greater focus on activity surveys like this week’s PMIs and Ifo, which have previously been overlooked by the Governing Council. But before then, there will be a long list of ECB speakers. Today, along with a TV interview from President Christine Lagarde herself, doves Panetta and Centeno, neutral members Villeroy and Rehn, and hawks Knot and Holzmann will speak, ING’s FX analyst Francesco Pesole notes.  

A list of ECB speakers on their way

“It is quite common for ECB members to fine-tune the policy message in the period after a rate decision. The key question is: are the hawks fine with Lagarde’s sanguine disinflation view, a gradual shift in focus to growth and such a dovish market pricing? Given some lingering pockets of sticky services inflation in the eurozone, the answer is probably no. But unless PMIs show some sign of life on the activity side, convincing markets to price out some easing will be no easy task.”

“Naturally, should we see signs of faltering resistance towards easing by arch-hawks like Knot and Holzmann today, expect the euro to feel some additional pressure. Yesterday, hawkish member Kazimir said the December decision is "wide open", quite a dovish shift from his pre-October meeting comments.”

“In the rest of Europe, we’ll be keeping a close eye on the first of four speeches Bank of England Governor Andrew Bailey is set to deliver this week. EUR/GBP has room to rebound from 0.8300 as markets may prove rather sensitive to any dovish hint by Bailey, and also considering some pre-UK budget positioning can see some buildup of GBP shorts. Looking at GBP/USD, our near-term bias remains 1.28.”