We learnt this week that the euro-zone fell into recession but Eurostat confirmed that employment rose sharply in Q1. The labour market seems to have remained quite strong in April and May but we think it will eventually succumb to the weakness in economic activity. Next week the ECB will almost certainly raise its key policy rates by 25bp but investors will be looking for clues about what will come next. We expect one final 25bp rate hike in July.
Central Bank Drop-In (15th June): We’ll be discussing the Fed and ECB June decisions and previewing the Bank of England’s upcoming meeting in a 20-minute online briefing at 10:00 EDT/15:00 BST on Thursday. Register Now.
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