Amidst its hawkish shift, the ECB needs to pay increasing attention to what is happening in the government bond markets. We doubt the central bank manages to calm government bond markets at the first attempt and look for more volatility ahead. The Week Ahead publication will take a summer break and return in a new format in August. “The more credible such instrument, the less it may have to be used in practice. This how a backstop works.“ – François Villeroy de Galhau, Governor of the Bank of France on 20 June That the ECB takes its inflation target seriously and is not willing to compromise on that due to problems i ... (full story)