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ECB more hawkish as investors rein in rate hike bets

The ECB’s hawkish conversion appears to be all but complete, with more officials this week joining the ranks of those calling for rates to rise in July and expressing a clear desire to get the deposit rate out of negative territory this year. That leaves the Bank consistent with our own call since March and that of investors. But worries about weaker growth means investors are now paring their expectations for rates next year and beyond. Next week, we expect data to confirm the small increase in euro-zone GDP in Q1 and show that employment also rose, while we will also be watching closely the minutes of the April ECB meeting.
Jessica Hinds Senior Europe Economist
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European Data Response

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12 August 2022

European Economics Focus

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More from Jessica Hinds

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The re-election of French President Emmanuel Macron gives him five more years to improve France’s economic potential and its public finances, with pension reform and the green transition central to his plans. But Le Pen’s greater vote share suggests he will have to work hard to keep the electorate on side. Drop-In (Thurs., 14:00 BST): Nordic & Swiss – Shortly after the Riksbank meeting, economists from our Europe and Markets services will be online to discuss the monetary policy outlook for the region’s economies and currencies as the ECB turns hawkish. Register now.

25 April 2022
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