Goldman Sachs has shifted closer to market pricing on the ECB. They now see a 25 bps cut in June and another July, which would get them to 1.75%.
The market is still skeptical on that timeline, seeing only an 80% chance of a cut in June and a lower likelihood of a cut at the July 24 meeting. The big event to watch for is July 9, which is the expiration of the reciprocal tariff exemption. So far progress on EU-US talks has been very slow.
Goldman Sachs also raised its GDP forecast for the Eurozone following the US-China deal and now sees +0.1% in Q3 and Q4 vs no growth prior. That’s hardly inspiring stuff.
This article was written by Adam Button at www.forexlive.com.