Q1 stagnation, rate cut in June likely but not done deal

Christine Lagarde’s comments this week suggest that a first ECB rate cut in June remains most likely but there is a significant risk that the easing cycle will start later. Meanwhile, surveys released this week support our view that the euro-zone economy stagnated in Q1 and we expect the ESI to confirm that next week. We also expect the Riksbank to keep its policy rate at 4.0% at its meeting next Tuesday. 

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