The key event next week will be Thursday’s ECB meeting when we think the Bank will cut the deposit rate from 4.0% to 3.75%. But strong services inflation in May and strong wage growth in Q1 may encourage the ECB to tread cautiously in the months ahead. Elsewhere, SNB Chairman Thomas Jordan gave a speech which suggested that FX interventions could be used as the tool for tightening policy rather than policy rates. But we do not think that the SNB will be intervening in the FX market over the coming months.
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