European Central Bank Governing Council member Bostjan Vasle on Tuesday said that an interest rate hike this year is feasible, reported newswires. It would be prudent for the ECB not to increase current uncertainties, he added, noting the important of monetary policy predictability. 

Market Reaction

Markets did not react to Vasle's latest remarks, but it has nonetheless been a volatile day for Eurozone bond/short-term interest rate markets. German 2-year yields came within a whisker of positive territory and interest rate future markets were at one point showing that 67bps of tightening by the end of the year is priced for the ECB.

These moves have now backed of a little, but markets are clearly saying they expect more than one rate hike from the ECB in 2022. Flash March Eurozone HICP inflation readings later in the week will be important in this context.