ECB: June Projections: Key In Shaping Initial Market Reaction [UPDATE]
This update includes additional sell-side views recieved over the last day.
The ECB’s June macroeconomic projections will be key in shaping the initial market reaction to Thursday’s policy statement. The statement will likely re-iterate the exceptionally uncertain outlook and the bank’s data-dependent stance, but a weak set of GDP/inflation projections could underscore the Governing Council’s dovish bias heading into H2. See below for a table of analyst expectations for the June projections.
- Real GDP: The main downward growth impact from US tariffs and associated uncertainty is expected in 2026, as the stronger-than-expected Q1 ’25 GDP print provides some offset this year. In 2027, some analysts pencil in upward revisions to account for higher EU/German fiscal spending.
- RBC and Commerzbank look for a one-tenth downward revision in 2025 to 0.8%, while Natixis and Nomura see a two tenth upward revision to 1.1%.
- The range of projections for 2026 is 0.9-1.2%.
- In 2027, SEB and UBS expect a 1.5% projection on a larger fiscal impulse.
- Headline inflation: The median analyst expects a two tenth downward revision in 2025 on weaker energy prices and a stronger EUR. The weaker growth expectations in 2026 also feed into lower headline inflation in that year.
- Four analysts see a three tenth downward revision in 2025 to 2.0%, while Natixis only see a one tenth decline to 2.2%.
- Several analysts see 2026 inflation revised two tenths lower to 1.7%. A reminder that the MNI Policy Team’s latest sources piece noted that this projection is likely to be either 1.7% or 1.8%.
- Core inflation: The median analyst expects a one tenth downward revision in 2026 relative to March, a small upward revision in 2025 and no change in 2027.
- The anticipated upward revision in 2025 is due to higher-than-expected spot core inflation pressures since March.
- Goldman and UBS expect a 1.8% reading in 2026, but a good number of analysts also see a one tenth upward revision to 2.0%. Nomura see a 2.1% projection for 2026.
- A reminder that the ECB will also present a scenario analysis in the June projection round, but it is unclear whether this will feature an alternative set of GDP/inflation projections.
- Note: The June macroeconomic projections are compiled by Eurosystem (i.e. National Central Bank) staff, while March was compiled by ECB staff.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
USDCAD TECHS: Hits Bear Trigger, New Cycle Low
- RES 4: 1.4415 High Apr 1
- RES 3: 1.4296 High Apr 7
- RES 2: 1.4087 50-day EMA
- RES 1: 1.3906/3935 High Apr 17 / 20-day EMA
- PRICE: 1.3793 @ 17:00 BST May 2
- SUP 1: 1.3760 Low Apr 21 and the bear trigger
- SUP 2: 1.3744 76.4% retracement of Sep 25 ‘24 - Feb 3 bull run
- SUP 3: 1.3696 Low Oct 10 2024
- SUP 4: 1.3643 Low Oct 9 ‘24
The trend set-up in USDCAD deteriorated further Friday, with prices slipping through the bear trigger to narrow the gap with next support. The fresh cycle low reinforces the bear cycle and signals scope for a continuation near-term. Potential is seen for a move towards 1.3744, a Fibonacci retracement. Moving average studies are in a bear mode position, highlighting a dominant downtrend. First resistance to watch is 1.3943, the 20-day EMA.
AUDUSD TECHS: Consolidation Phase
- RES 4: 0.6550 61.8% retracement of the Sep 30 ‘24 - Apr 9 bear leg
- RES 3: 0.6528 High Nov 29 ‘24
- RES 2: 0.6471 High Dec 9 ‘24
- RES 1: 0.6470 High May 2
- PRICE: 0.6445 @ 16:59 BST May 2
- SUP 1: 0.6344/6316 Low Apr 24 / 50-day EMA
- SUP 2: 0.6181 Low Apr 11
- SUP 3: 0.6116 Low Apr 10
- SUP 4: 0.5915 Low Apr 9 and key support
AUDUSD remains inside a consolidation phase, having traded either side of the 0.6400 level for 10 consecutive sessions. The underlying trend remains bullish and the pair is trading close to recent highs. Price has recently breached a key resistance at 0.6409, the Dec 9 ‘24 high. This breach reinforces bullish conditions and signals scope for a continuation higher near-term. Sights are on 0.6471 next, the Dec 9 2024 high. Initial key support to monitor is 0.6316, the 50-day EMA. A clear break of this EMA would be a concern for bulls.
US TSYS: Rates Retreat, Sentiment Improved Though Trade Risk Remains
- Treasuries look to finish near late Friday session lows after trading firmer on the open, higher than expected Nonfarm payrolls at 177k (sa, cons 138k) of which private contributed 167k (sa, cons 125k) triggered the early reversal.
- However, two-month revisions of -58k offset the 39k beat for nonfarm payrolls, with a similar story for private (a 42k surprise vs -48k two-month revision).
- Stocks are back near four week highs - pre-"Liberation Day" levels as hopes of some trade deal being made improved sentiment.
- The Wall Street Journal reports that "Beijing is considering ways to address the Trump administration’s gripes over China’s role in the fentanyl trade... potentially offering an off-ramp from hostilities to allow for trade talks to start." The Journal notes that "discussions remain fluid" and China "would like to see some softening of stance from President Trump".
- Currently, the Jun'25 10Y contract trades -20 at 111-07.5 vs 111-02 low -- initial technical support (50-dma) followed by 110-16.5/109-08 (Low Apr 22 / 11 and the bear trigger). Curves bear flattened, 2s10s -3.480 at 48.002, 5s30s -4.911 at 86.807.
