Bank of America Global Research discusses its expectations for the ECB June policy meeting.
"We are waiting for the long-overdue ECB hawkish pivot in June, but we are not sure it will be enough to support the EUR. The market is already pricing the end of ECB QE in June, then 4 hikes this year and almost 4 more next year. Our economists agree with the market for this year, but expect only 2 hikes next year. With Eurozone headline and core inflation at all-time highs, and unemployment at an all-time low, we believe it will take much more for the ECB's monetary policy stance to turn tight, and even more to be tight enough to bring inflation down to the target" BofA notes.
"We don't expect the ECB to try to talk the EUR up. In our view, the weak EUR is the symptom of the ECB's excessively loose monetary policies, rather than the cause of high inflation. In any case, the weak EURUSD reflects more USD strength than EUR weakness,"BofA adds.