We are nudging up our peak ECB rate forecast in light of communications from ECB officials at Sintra and the latest economic data. We now see 25bp rate hikes in both July and September, taking the deposit rate to 4%. Meanwhile, the Riksbank’s plans to hedge some of its foreign currency exposure do not change our view that the Swedish krona is most likely to depreciate by the end of the year. Next week we expect to learn that Swiss inflation dropped below 2% and that euro-zone retail sales rose but German industrial production fell in May.
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