TechFlow news, July 18: Scotiabank stated that policy adjustments do not need to be linear, especially during periods of high uncertainty. This view seems to be dominating market pricing for the ECB's interest rate decision next Thursday. The market expects that after raising interest rates by 25 basis points in June, the ECB will keep the deposit rate unchanged at 2.25%. The general market expectation is also to remain unchanged. ECB President Lagarde's last significant statement was on July 1, when she stated: "I believe that the upside risks to inflation and downside risks to growth we face may be more balanced than a few weeks ago, because changes are happening rapidly." Since then, however, conflicts between the US and Iran have erupted again. Both WTI and Brent crude oil rose by about $12 per barrel. Offsetting this to some extent, the June inflation report may have bought the ECB more time to assess the situation, after all, the ECB adheres to the "data-dependent" principle. The overall CPI in the Eurozone fell 0.1% month-on-month, while core CPI year-on-year fell back from 2.6% (the highest since April last year) to 2.4%. Nevertheless, market sentiment indicators clearly show that hawks still dominate overall. (Jin10 Data APP)
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