Influencing market expectations on interest rates through so-called "forward guidance". The ECB has been indicating, for some time, that interest rates are set to remain very low for a prolonged period in the Eurozone. More recently, it has indicated that the key deposit rate will be maintained at -0.4% until at least autumn 2019. This shifted rate expectations downwards, with markets of the view that rates will remain lower for an even longer period of time in the Eurozone.

Last weeks, the US and China both impose further tariffs on imports. However, concerns over trade and other downside risks to global growth are being swamped in a tsunami of robust data on the US economy. As a result, markets expectations are moving closer to the Fed’s view that rates will need to continue to rise until 2020. Markets are now pricing in two rate hikes for 2019, on top of the two that the Fed is expected to make in the next 2 months. This would take the rate up