In the wake of an exclusive Reuters report, financial markets adjusted expectations around future euro rate rises. Reuters reported that the European Central Bank was still leaning towards a 50-basis point hike, despite volatility after the Silicon Valley Bank collapse. The Reuters report, which prompted German bond futures to fall, revealed that policymakers were confident that turmoil around SBV was dissipating, and that the regional economy was strong enough to withstand further policy tightening aimed at tackling inflation. Investors had started to doubt that commitment as the SVB drama unfolded. Data released hours after the report underlined that analysis, showing a stronger than expected rise in industrial production while Germany, the bloc’s largest economy, was also seen picking up. In the ECB’s Thursday meeting it was confirmed that they, indeed, hiked by 50 basis points.
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