Export-led recovery, higher ECB forecast

Data released this week showed that the euro-zone’s recovery in the first quarter  was mainly driven by exports, with domestic demand still subdued. Nevertheless, the recent stronger-than-expected inflation and wage prints mean we now expect fewer and slower cuts by the ECB in this cycle. Otherwise, big gains by far right parties in the EU election this weekend are unlikely to have much bearing on EU policy as centrist parties should retain a majority.