ECB expected to hike rates by 25bp
The European Central Bank is poised to deliver a fully priced 25bp hike, shifting market focus to guidance for the path of rates beyond summer.
Forwards already discount more than two further hikes this year, which is deemed ambitious given the current backdrop.
The bar for a hawkish surprise is high, requiring more explicit comments from the ECB President.
The ECB’s projections and scenarios will be key, having assumed 40bp in hikes until year-end in March.