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ECB

Very little is expected from this week's ECB meeting.

  • Heightened economic uncertainty and a diffusion of financial fragmentation risks following a raft of policy easing measures since March has reduced the urgency for further immediate action.
  • The recent euro appreciation and return to deflation territory for HICP has ratcheted up the pressure, but as long as the revised staff macroeconomic projections show that the baseline forecast remains broadly intact, the ECB is likely to stand pat for the time being.
  • Questions during the press conference are likely to focus on the recent EUR strengthen, the PEPP enveloped (clarification on whether it is a target or a ceiling) and the Fed's shift to average inflation target.

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