ECB's Visco: Normalization can continue to be gradual, meaning 25-50 bps

• Overly-gradual monetary shift would compromise ECB credibility
• Overly-rapid shift would jeopardise financial stability
• I think normalization can continue to be gradual, it can mean 25 or 50 bps
• After Sept, will continue to hike in gradual but sustained way
• A spread of 150 bps would be justified
• A spread of 200 bps would be unjustified

I don't think this tells us much about what's coming. But 50 bps is certainly on the table. For the euro, the more-important thing will be the anti-fragmentation tool. Italian 10-year yields are up 3 bps today compared to bunds up 14 bps. The spread is 212 bps currently.

The ECB deciding exactly what the proper spread should be is disquieting.

EUR EUR The euro (EUR) is the official currency of the European Union (EU) and 19 of 27 member states at the time of writing. It is the second most-traded currency worldwide in forex markets after the US dollar.The euro was originally introduced back on January 1, 1999, having replaced the European Currency Unit. Banknotes and physical euro coins subsequently entered circulation only in 2002.Upon its adoption, the euro replaced domestic currencies in participating EU member states. The rise in its value The euro (EUR) is the official currency of the European Union (EU) and 19 of 27 member states at the time of writing. It is the second most-traded currency worldwide in forex markets after the US dollar.The euro was originally introduced back on January 1, 1999, having replaced the European Currency Unit. Banknotes and physical euro coins subsequently entered circulation only in 2002.Upon its adoption, the euro replaced domestic currencies in participating EU member states. The rise in its value Read this Term/USD is down 10 pips to 1.0435 today.