ECB's Villeroy says next change in rates is highly likely to be upwards; it is far too early to predict when this will happen, but ECB has capacity to act when and in whatever way necessary

Villeroy's comments suggest a shift towards a more hawkish stance by the ECB, indicating that the next rate move will likely be upward. While he emphasizes uncertainty around the timing, the readiness to act reinforces the notion that the ECB is vigilant about inflation pressures. This could influence expectations for euro strength and impact fixed income markets as traders reassess their outlook for rates.