Mabrouk Chetouane, global market strategist at Natixis IM, said markets have fully priced an ECB rate increase this week but Lagarde will be cautious at the press conference and seek to present the tightening as a "dovish hike". He said the absence of clear evidence that rising energy prices are spilling into the real economy, plus a weak euro-area cycle, supports a milder inflation response; nevertheless, in line with its duty to anchor market expectations the ECB Governing Council will still r

Mabrouk Chetouane, global market strategist at Natixis IM, said markets have fully priced an ECB rate increase this week but Lagarde will be cautious at the press conference and seek to present the tightening as a "dovish hike". He said the absence of clear evidence that rising energy prices are spilling into the real economy, plus a weak euro-area cycle, supports a milder inflation response; nevertheless, in line with its duty to anchor market expectations the ECB Governing Council will still raise rates to bolster credibility and demonstrate its ability to act.