Daily Commentary BY THE CURVE TEAM –

ECB Implications

27th of April, 2018

What do you do when the data doesn’t support your intentions?

The rhetoric from the ECB remains unchanged with Draghi again insisting the underlying strength in the economy will pull inflation to higher levels. There has been a recent softening in the ECB’s data and economists seem to be wary of the numbers despite Draghi’s best efforts to put any fears at ease.

He said there has been “caution in reading recent developments, but unchanged confidence in inflation returning to target.” Digesting all this, it is clear the ECB will require further economic data releases and assessments before making a decision on any policy alterations.

In the US, the 10-year treasury note failed to stay above the 3.00% mark, sitting at 2.98%. Most market participants seem to be thinking the US yield-curve will continue to rise but also flatten, with short-term yields likely to rise quicker than long-term yields. The Q1 US GDP number is expected to print at 0.4%, taking the annual US GDP figure to 2%.

James Winder

Associate Director