S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
DAX 40 — German Equities
CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
ASX 200 — Australian Market
TSX Composite — Canada Index
Nifty 50 — India Large Cap
STI Index — Singapore Market
KOSPI — South Korea Index
Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
ING notes that ECB officials have offered little resistance to hawkish market pricing as Oil rises, reinforcing front-end EUR rate expectations. However, a competing narrative of prolonged energy disruption is emerging, supported by President Lagarde’s comments that war-related infrastructure damage could impair energy supply for years, potentially forcing “forceful” monetary action and lifting rates across the 2y–10y sector in tandem with the front end.
Lagarde flags long-lasting energy risks
“And with European Central Bank officials giving little pushback to the hawkish pricing, we don’t see why markets would deviate from this trading strategy.”
“However, another narrative is gaining traction as of late whereby energy disruptions will last much longer than initially feared.”
“She [Lagarde] remarked that risks from the war are being underestimated and that the ECB’s technical experts believe that damage already incurred to the infrastructure was enough to disrupt the energy supply for years rather than just months.”
“Laying out the spectrum of possible responses just earlier this week, she said “large, sustained deviations call for forceful monetary policy action.””
“The front end is back to pricing more than three ECB hikes this year.”
