ING’s Francesco Pesole highlights that ECB President Christine Lagarde and other Governing Council members are expected to maintain a broadly hawkish tone given Gulf volatility. Markets price modest tightening at the 30 April meeting and two further hikes this year. ING argues that clear progress in US‑Iran talks is needed to sustainably lift EUR/USD above 1.180.

Lagarde remarks and Gulf risks guide Euro

"ECB President Christine Lagarde will speak tonight in Washington. A few other Governing Council speakers are scheduled for earlier in the day. We would expect ECB officials to reiterate a broadly hawkish tone considering the lingering volatility in the Gulf."

"It would be quite surprising for markets to hear comments along the lines of “de-escalation reduces the likelihood of monetary tightening"."

"Pricing for the 30 April meeting is 10bp, and perhaps a lack of urgency in ECB comments can now help investors align with a hold this month."

"But two hikes later this year are becoming very much entrenched in swap pricing."

"We feel that clear progress in US-Iran talks is needed to sustainably take EUR/USD above 1.180."

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