European Central Bank member Robert Holzmann has stated that the central bank's rates will be higher in a year but hikes will be data-dependent. he adds that they underestimated the pace of inflation gains and that the ECB could have begun hiking sooner.

Key notes

• The Bank has shown its prepared to go beyond expectations.
• There is a possibility of stagflation in the eurozone.

Meanwhile, markets appeared to be returning to normal on Wednesday following the prior day's volatility that came on the back of the US inflation data. The euro regained some composure and is up 0.11% at 0.9977 after recovering from 0.9955 earlier in the day.