The euro has already forgotten about the weak PMI data

No breakthrough in Sintra so far. The market did not receive any new information on monetary policy EBC. Representatives of this institution, however, use this "event" to confirm their position. Christine Lagarde stressed that the European institution is still far from announcing the end of the monetary tightening cycle.

The single currency is strengthening

The euro is getting stronger day by day. EUR / USD exchange rate reached highs yesterday at 1,0976. All the downward movement from last week, caused by weaker PMI data, has already been more than offset.

In addition to Lagarde's "hawkish" words, we also received similar-sounding statements from Martin Kazaks - the governor of the Latvian central bank. He signaled that the first rate cuts are possible, but only when inflation drops below 2 percent.

What will the heads of central banks determine?

Yesterday's reaction to comments from the ECB shows that the market considers this bank as one of the most restrictive institutions in the world. The Eurodollar is approaching 1,10 and a retest of the late April/early May highs (1,1090) seems only a matter of time. Yield of German bonds managed to rise yesterday reaching above 2,36. This morning, the gains continue.

Today, the focus will be on a discussion panel in Sintra, attended by the heads of the world's major central banks (Fed, ECB, BoE and BoJ). Apart from that, Friday's publications on inflation from the euro zone promise to be interesting. Thursday's CPI releases from Germany and Spain may provide some hints on price developments. If in these two days the data will surprise on the positive side, then we will receive confirmation restrictive approach of the ECB and the euro will remain strong.

Source: Łukasz Zembik, OANDA TMS Brokers