“Our house call was for the ECB to hike by 50 bps, but the combo of below-forecast 1Q GDP growth , a decline in core inflation to 5.6% in April , tightening in ECB bank lending conditions and lower demand for loans tilted the scales in favour of a 25 bps.”that the tightening cycle is not over in theory should be conducive to the EUR/USD overcoming the April high of 1.1095 and having a go at 1.11 when the large option expiry rolls off and delta hedging flows subside.
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