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ECB: markets fear a 0.5% rise and await shield details

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(ANSA) – MILAN, JULY 20 – The hypothesis that the ECB raises rates by 50 basis points, which is double what has been announced, is gaining more and more share on the market. There remains a certain volatility linked to the lack of details on the anti-fragmentation shield. “We expect the European Central Bank to be more explicit or even already announce the operation of this instrument. We see the risk, however, that this new instrument may not correspond to market expectations. In this case, peripheral debt could be put under pressure “, underlines Martin Wolburg, senior economist at Generali Investments. As for rates and a “more aggressive approach”, according to Gabriel Debach, eToro market analyst, “such a move would mark a clear deviation from the guidance that the ECB has recently provided to inform the markets. However, it is true that” Frankfurt “has always reported to want to move in a ‘data dependent’ context and on the dual principles of ‘graduality and openness to all options’ “. “In any case, if the recession were to materialize, we could soon return to the ‘interest rate trap’ that has imprisoned Europe in recent years, a scenario in which it is particularly difficult to implement a policy of raising interest rates”, warns Giancarlo Bilotta. , Portfolio Manager Credit Strategies of Plenisfer Investments SGR. “In this scenario – it is pointed out – we would see a new decline in nominal rates and a reduction in both government and corporate spreads, which have so far been penalized by concerns about the expected growth in rates that have supported the volatility of the bond market. (ANSA ).

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Source: Ansa

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