Market movers today
With the Fed meeting behind us, focus turns to the ECB meeting. We do not expect any changes in policy or forward guidance, but some hawkish comments could be envisaged. Instead, we expect the forward guidance to change in July. The ECB will also publish new growth and inflation projections, where we expect a lower growth forecast for 2018 and an increase in inflation projections, especially for 2018. Furthermore, focus will also be on how President Draghi will address In Sweden, we expect CPIF and CPIF ex energy to both overshoot Riksbank's forecast (0.2pp and 0.04pp, respectively). This would bolster the Riksbank's current plans for a rate hike in Q4 this year to which we assign about a 20% probability. For more details, see page 2.
In the US and the UK, retail sales in May are due out.
The Bank of Japan meets today and is expected to announce its monetary policy early Friday morning European time. We expect both the policy balance rate and the 10Y yield target to be left unchanged, at 0.10% and 0.00%, respectively.
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