Weapons in the quiver of “ECB hawks” (ie of central bankers pushing for further big interest rate hikes) is offered by rising structural inflation in the eurozone.

In January the relative index registered a rise of 5.3%beating even the most modest forecasts.

This development reflects the prolonged upward pressure on prices caused by Russia’s war in Ukraine. Consequently, the ground is paved for new increases in interest rates from ECBbeyond that of March by 0.5% which has already been announced.

It is recalled that ECB Governing Council member Isabel Schnabel predicted that the peak of the upward cycle will be completed when the key interest rate reaches 3.75% (from 2.5% that it is today).

In the secondary market, in the Electronic Transactions System (HDAT) the volume of transactions was 113 million euros, of which 79 million euros related to purchase orders.

The yield on the benchmark 10-year bond was held at 4.44% versus 2.48% for the German counterpart, bringing the spread to 1.96% from 1.93% yesterday.

In the foreign exchange market, the euro is moving lower against the dollar today as in the early afternoon the European currency was trading at $1.0597 from the level of $1.0601 that opened the market. The indicative euro/dollar exchange rate announced by the ECB was 1.0616 dollars.