• ECB will remain vigilant
• We will not be inactive or overreact to volatility in energy markets
• We have the ability to act if necessary, ready to do so to stabilise inflation at the 2% target
• A rate hike looks to be likelier than a rate cut, but the latter cannot be ruled out
• Potential rate hikes will be decided meeting by meeting
• We have the eyes on the ball and the hands ready to act

He’s less hawkish sounding on his remarks but if anything, it reaffirms a subtle shift in communique still. While not as loud as Nagel earlier here, he’s still highlighting the potential need for rate hikes sooner rather than later. And that continues to reflect a key change in the ECB narrative since last month. What a difference three weeks makes.

The euro isn’t really moving much on the comments after a bit more of a hawkish repricing yesterday already. EUR/USD is down 0.3% to 1.1558 currently, with the dollar keeping steadier for the most part today.

In terms of ECB pricing, we’re now seeing odds of a 25 bps rate hike for April at around ~58%. That then rises to ~88% for the June meeting.