European Central Bank: June hike seen with focus on signals – Danske Bank

Danske Research Team expects the European Central Bank (ECB) to raise the deposit rate by 25bp to 2.25%, in line with consensus. With the June move fully priced, they see market attention shifting to communication on future policy. They anticipate President Lagarde will retain flexibility and projects a final 25bp hike in Q3, taking the deposit rate to 2.50%.

Markets eye guidance beyond June move

"As the main event of the week in Europe, we expect the ECB to hike the deposit rate by 25bp to 2.25%, in line with consensus and markets."

"With the June hike fully priced in by markets, all focus during the press conference will be on signals."

"We expect Lagarde to keep full optionality on the future policy rate path, including a potential summer hike, but without pre-committing."

"Looking ahead, we forecast a final 25bp hike in Q3, bringing the deposit rate to 2.50%."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)