All eyes on the latest inflation numbers out of the euro zone as market players consider what the ECB will do next.
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Inflation in the euro zone eased slightly in February, following comments from the head of the European Central Bank that bringing rates down would take some time.
Headline inflation in the 20-member bloc came in at 8.5% in February, according to preliminary data released Thursday. By comparison, prices seem to have cooled off for the third consecutive month in January, with headline inflation at 8.6%.
Market players have been wondering whether the ECB should maintain its hawkish stance for longer, following hotter-than-expected February inflation figures from France, Germany and Spain.
ECB President Christine Lagarde said on Thursday that reducing inflation would still take time, according to comments reported by Reuters. The bank is targeting a headline rate of 2%.
The Frankfurt-based institution indicated that another 50 basis point hike is on the cards when the central bank delays this month. In comments reported by Reuters, Lagarde said on Friday that this move is still on the table, as inflation remains above target.
Analysts at Goldman Sachs said earlier this week that they were raising their rate hike expectations for the ECB and pricing in another 50 basis point hike in May.
European bond yields have moved to multi-year highs in recent days, amid speculation that hawkish monetary policy remains in place.
This is the latest news and is being updated.