A 10 bps rate hike is now fully priced in for July 2022
This comes as euro area bond yields continue to surge higher, with Italian 10-year yields rising to 1.17% – its highest since July 2020. Adding to that, the closely watched gap between 10-year Italian and German yields is now at its widest since

Latest data released by Eurostat – 29 October 2021

Latest data released by Destatis – 28 October 2021
Base effects have some role to do with this amid the VAT reduction in the second half of last year but the trend across the region is undeniable as rising cost pressures and import/producer prices are also feeding through to consumer inflation now.

ECB announces their latest monetary policy decision – 28 October 2021
Pretty much no key changes whatsoever to the statement details and forward guidance, as is expected. It is all about the language today and that will center on Lagarde’s press conference instead, as mentioned earlier .

The market will poke an prod at Lagarde’s comments on inflation
Keep an eye out for any talk about the economic outlook as the inevitable slowdown carries over to next year and also watch for any remarks on how policymakers are viewing market expectations on any rate moves by the ECB.

Forex news from the European trading session – 28 October 2021
Headlines:
Markets:
– JPY leads, CHF lags on the day
– European equities mixed; S&P 500 futures up 0.3%

A placeholder meeting for December?
Well, for the most part perhaps. No changes to policy is expected as the ECB continues to slowly wind down PEPP by March next year. I’d still argue that they will keep that timeline in place just to be safe rather than sorry.

Forex news from the European trading session – 27 October 2021
Headlines:
Markets:
– JPY leads, GBP lags on the day
– European equities lower; S&P 500 futures flat

Latest data from the Mortgage Bankers Association for the week ending 22 October 2021
–  -6.3%
– Market index 645.1 vs 643.0 prior
– Purchase index 275.6 vs 266.2 prior

Kaisa Group downgraded to ‚CCC+‘ on refinancing risk
Kaisa is a familiar name when it comes to this as it was the first Chinese property developer to default on its dollar bond coupon back in 2015. The firm came back from the dead to return to the debt market in 2019 but is facing more troubles