The ECB will leave the deposit rate unchanged at 2.0% next week and we expect Christine Lagarde to repeat that monetary policy is in a “good place”. She might also suggest that the next move in interest rates is just as likely to be upwards and downwards. Given that investors think cuts are more likely than hikes (as do we), this messaging might be seen as slightly hawkish. President Lagarde might also face more questions about France and the Transmission Protection Instrument, but we are a long way from policymakers needing to intervene in bond markets.
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