SEB Research previews the June ECB policy meeting on Thursday.

"Inflationary risks from higher energy prices will result in a preemptive rate hike by 25 bp. However, the ECB is likely to signal that they are datadependent and not pre-committing beyond June. Indirect and second-round effects from the war in the Middle East are not evident in data yet, and they are key for the ECB’s interest rate decision going forward. However, service inflation continues to be elevated," SEB notes.

"We will pay extra attention to forecast revisions as well as updated scenarios due to the war in the Middle East," SEB adds.