ECB policymaker Escriva says the ECB needs to monitor for second-round effects on wages

New data release: ECB wage tracker indicates negotiated wage pressures stable in 2026

The desk believes that the ECB's wage tracker data signals a stable wage growth outlook, which may influence the euro's trajectory against the dollar. Per the full note [source], the ECB wage tracker indicates negotiated wage growth stabilizing at around 2.6% for 2026, with a slight easing from 3.8% in 2025. This stability in wages, coupled with the ECB's cautious approach to monetary policy, suggests a more measured path for the euro as inflation pressures moderate. Upcoming inflation data releases on June 2 will be critical in assessing the market's response to these wage dynamics.

New data release: ECB wage tracker points to stable negotiated wage pressures in 2026

ECB's Lagarde: Most measures of longer term inflation stand around 2%

The ECB's current stance reflects a cautious approach amid mixed inflation signals, with President Lagarde emphasizing that the eurozone's inflation metrics remain around the target of 2%. Per the full note [source], while short-term inflation expectations are rising, easing labor costs suggest that the ECB has room to maintain rates without immediate hikes. This nuanced positioning is critical as the market anticipates potential shifts in policy, particularly with a June hike currently priced at 76%. The desk believes that the ECB's wait-and-see approach will be pivotal in shaping the euro's trajectory in the coming weeks.

ECB policymaker Wunsch says upside surprises in inflation would justify further tightening