ECB and Fed Policy Outlook (with Lizzie Burden)

ECB will likely hike 1-2 times as insurance, not a long series. Growth risks in Europe are key - services PMIs softening. Fed bias is to hold despite strong jobs data - wage pressure didn't accelerate and many jobs came in temporary leisure/hospitality. Euro likely to weaken until peace deal in Middle East.

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Lauren Van Biljon 7.5

ECB and Fed Policy Outlook (with Lizzie Burden)

dxy

I'd be biased for that euro to weaken, at least into any sort of peace deal

yields

ECB likely to hike 1-2 times as insurance. Fed bias is to hold but data is strong. If Lagarde isn't hawkish, yields could drop - suggesting current expectation is for yields to rise but with downside risk.

Lizzie Burden

ECB likely to hike Thursday. Is it one and done?
Lauren Van Biljon

ECB could do 1-2 insurance hikes, not a long series into next year. Macro setup doesn't support that. In Europe, this is downside growth risk - services PMIs are softening. ECB needs to think beyond short-term inflation to longer-term growth. If Lagarde isn't as hawkish as expected, yields could drop. We're long 2-year bonds, using the conflict to add European duration.

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