With several members of the ECB Governing Council coming out in favour of a July rate hike this week we are feeling more confident in our forecast that the Bank will raise its deposit rate to +0.25% by the end of the year, and to 1.5% by the end of next year. More immediately, markets now seem to be pricing in a very high chance of President Macron winning a second term in Sunday’s presidential election, so there is little room for a relief rally on Monday if that does transpire.
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