ECB's firm commitment to hiking rates | 09 Septiembre 2022

09 Septiembre 2022, EUR/USD

EURUSD trading plan:

Germany's two-year government bond yield jumped to its highest since 2011 on Thursday, after the European Central Bank delivered an unprecedented 75 basis points interest rate hike and took steps to prevent a further squeeze in bonds. That followed a decision by the central bank to hike its deposit rate to 0.75% from zero. The ECB also signalled further hikes, prioritising the fight against inflation even as the bloc's economy is heading for a likely winter recession. Germany's two-year bond yield soared more than 20 bps to 1.324%, its highest since 2011, while 10-year bond yields were up 14 bps to 1.71%. The gap between the two-year euro swap rate and Germany's two-year yield dropped over 15 bps to 0.90%, after rising to the highest since the euro zone debt crisis earlier this week at around 115 bps.

Investment idea: range 1.0035 -1.0135.

David Johnson
Analyst of «FreshForex» company
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