Recent bond market sell-off a warning of future periods of higher volatility

The ECB's June meeting was very much in line with our expectations: the tone remained dovish with the favourable forecasts conditional on the full implementation of current asset purchase plans, said Soc Gen

The inflation forecast was revised up slightly for this year and growth down slightly for 2017. Also the press conference was well in line with expectations with questions focused predominantly on Greece, on which Draghi stressed the need for a "strong agreement" but avoided details by referring to the ongoing negotiations. 

The ECB's communication policy, the bond market sell-off and the possible timing of an exit from current policies were also discussed without clear answers. 

"We noted Draghi's concerns that regulatory requirements make it harder for financial institutions to manage in the low rate environment, suggesting some need of further adjustment, while also warning that we need to get used to higher volatility due to the very low level of interest rates." notes Societe Generale