ECB meeting looms

What seemed impossible at first appears to turn into reality, with all the precautions that should be taken with such news. But everything indicates that the ECB is determined to tackle inflation more decisively. However, if the ECB raises rates by 50 bps and it presents a credible plan to avoid the fragmentation of peripheral bonds, especially in Italy, the market will most likely receive a boost. Investors now anticipate this possibility and have reacted very positively to the news. Even though a rise in interest rates, especially if it is more aggressive than expected, usually hurts risk assets. On this occasion, the market needed a central bank more determined to fight against inflation and, above all, with determination and without hesitation. And because of this, the European indices experienced notable increases yesterday with special reference to the German DAX index, which advanced more than 3%, the largest rise in recent months.