MNI ECB Review: All Set For A June Hike

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• The ECB kept rates on hold as expected including the deposit rate at 2.0% (in 1.75-2.25% neutral range).
• However, President Lagarde played into market pricing of a high likelihood of a 25bp hike in June with various references to the meeting and the acknowledgement of moving away from the baseline projection.
• Her remarks chimed with the "measured adjustment" reaction outlined in her speech a few weeks ago, which she referred to today.
• We judge that would represent between 1-3x25bp hikes this year, potentially the mid-point considering the speed of recent declines in surveyed business and consumer activity, although with the market pricing three hikes (73bp currently vs 76bp pre-decision).
• Traditional ECB sources reporting from Reuters and Bloomberg after the decision both clearly leaned towards a June hike as well. 
• ECB-dated June OIS has eased a little to 23bp of hikes since the decision, partly on the continued pullback in crude oil futures but also the fact that pre-decision pricing above 25bps for June had become too stretched considering the ECB will also be wrestling with growth risks.
• In our mind there is still a good question as to why the ECB wouldn't opt for a back-to-back hike in July (cumulative 39.5bp priced) considering its current perceived determination to hike in June.