00:00I'm Christine Lagarde. I'm looking at these numbers. What do I think about what I'm seeing
00:04across the inflationary picture across Europe this morning? Because consumers are clearly
00:08worried about inflation and inflation numbers broadly are ticking higher.
00:12Yeah, there's clearly a cause for concern. But in terms of today's meeting, probably
00:15not too much read through. Like you said, we're interested in what the core readings
00:18are doing. And we still don't quite have that information at the moment. So for the ECB
00:23today, probably won't be the most interesting of the two meetings. I think the market's
00:27pretty comfortable in its view that the ECB can retain optionality towards a potential
00:31June hike. And so there's probably not going to be too much pushback from the ECB on that
00:35front. I think when the market's that one-sided, it is worth exploring where could the asymmetry
00:40be. And I think there is an argument to make it could be in a dovish direction, not necessarily
00:44my base case. But the ECB has been all in on inflation. If they kind of acknowledge the
00:49growth implications or longer term inflation gauges, such as the five-year, five-year inflation
00:55forward, which is a guiding light for their policy settings, that could potentially put
00:59a bit of a dovish tilt on the release. Not my base case, but something to watch out for.
01:03I think when it comes to the euro, if we do see this hawkish optionality retained, what
01:08happens with the euro on a day where we've got a bit of a haven bid in the dollar on
01:12Iran?
01:12What's that kind of push and pull effect? And where do we land?
01:15Do we get a dovish tilt from the BOE, given the sell-off that we saw after their March meeting?
01:19Yes, I think the BOE is a more interesting one by virtue of the fact we just get so much
01:22more information. We get the vote split. We get the individual accounts, which, yes,
01:26gives transparency, but also injects volatility. And we also have a projection meeting as well.
01:32There's definitely more of a push and pull between the market and the Bank of England.
01:36And like you said, some of that is obviously a clean-up job from the March meeting, which
01:39was a disaster, to put it mildly. But we'll see how we kind of get with that, because do
01:45we get Bailey continuing to push back on the market, saying you're getting ahead of itself?
01:49We're kind of in the vicinity of where market pricing was when he did do that.
01:53Three hikes.
01:54Exactly, yes. So, you know, are the Bank of England comfortable with that? Do we get pushback?
01:58Does the market even care about that? Is it still looking to run with it?
02:01But if you do get a dovish tilt and the ECB stays hawkish, that could potentially be upside
02:05in euro sterling. And, you know, for the pounds, what's the BOE's cleared?
02:08You've also got political risk on the docket next week. And UK yields, you know,
02:12they continue to rise at the back end.
02:14Mm. Busy UK political story, as well, as you say. What about the oil price, then? Up
02:19by another 3.8% this morning. 1.22 is the handle on Brent right now, Adam. Euro stocks,
02:2550 futures, suggesting we'll be down by 1%. We have – that is set to be the dominant theme.
02:32Of course, there's the sort of tech earnings theme in there as well, which could have an
02:36impact. But broadly, it's the oil price that we're focused on.
02:39Yeah, I think oil prices are clearly a concern. I mean, for June, above 1.20, you know, that
02:43contract expires today. But if you look at July, we're still above 1.10. So, you know,
02:47the market was comfortable in that 90 to kind of 100 range. Clearly, that thesis is being
02:51tested today. We've seen that filter through into European equities. And concernably, we've
02:56seen, though, for the US that we did have those, you know, good earnings from Alphabet,
03:00Amazon. That's unable to prop up the market. That's clearly a cause for concern. And when
03:04they move out of the way, you know, how much of a negative follow-through do we get into
03:08US stocks? That's what we're watching.
03:09Okay. Adam, thank you very much. Adam Linton from Bloomberg Markets Live. Remember, you
03:13can get up-to-date analysis and insight from Adam and the rest of the Markets Live team.
03:17NLIV Go is the function to use on the Bloomberg Terminal.
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