A 10 bps rate hike is now fully priced in for July 2022
This comes as euro area bond yields continue to surge higher, with Italian 10-year yields rising to 1.17% - its highest since July 2020. Adding to that, the closely watched gap between 10-year Italian and German yields is now at its widest since November last year.
The jump in Italian 10-year yields is staggering (19 bps), setting the stage for the biggest one-day increase since April last year.
I'm betting Lagarde would've wished a redo of her press conference yesterday at this point.
