Luis de Guindos: Presentation of the European Central Bank Annual Report 2025 to the Committee on Economic and Monetary Affairs of the European Parliament
At a Glance
The desk interprets Luis de Guindos' recent remarks to the European Parliament as a signal of the ECB's commitment to maintaining a cautious approach to monetary policy, despite rising inflationary pressures. Per the full note source, de Guindos emphasized the need for vigilance in light of persistent inflation, which could influence future rate decisions. Current market positioning reflects a consensus that the ECB will likely hold rates steady in the near term, with traders closely monitoring inflation data for any shifts. This aligns with our view that the EUR/USD will remain within a defined range as the market digests these signals.
Full Analysis
What the desk is arguing
The desk believes that the ECB's cautious stance, as articulated by de Guindos, will support the euro against the dollar in the short term. He highlighted that inflation remains a critical concern, which suggests that any rate hikes will be gradual and data-dependent.
The ECB's inflation target remains at 2%, and with current inflation rates hovering around 3.5%, the central bank is likely to maintain a steady hand. This aligns with our expectation that the EUR/USD will trade in a range, reflecting the balance between inflationary pressures and the ECB's cautious approach.
Where it sits in our coverage
Our consensus target for EUR/USD is 1.075, with a range from 1.04 to 1.12. Notable targets from other firms include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26)
This view aligns with jpmorgan, which sees the euro strengthening, while bofa holds a more bearish outlook, suggesting divergence in expectations for the euro's performance against the dollar.
How other firms see it
Firms like jpmorgan and citi are aligned with our view, anticipating a stable euro as the ECB navigates inflation concerns. Conversely, bofa and goldman express a more cautious outlook, predicting potential weakness in the euro if inflation does not subside.
Key indicators to watch include the upcoming inflation data from the Eurozone and the ECB's next policy meeting, which will be crucial for assessing the trajectory of EUR/USD. The interplay between ECB policy and US economic indicators will also be significant in shaping market sentiment.
What the calendar says
...
What changed vs prior statement
- 01No material change in policy stance vs prior statement.
- 02Language essentially preserved across key paragraphs regarding monetary policy outlook.
- 03No vote-record change.
From the original
Introductory remarks by Mr Luis de Guindos, Vice-President of the European Central Bank, to the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 4 May 2026.
Related speeches
4 itemsLuis de Guindos: Deepening financial integration to support Europe's prosperity
The desk interprets Luis de Guindos' recent remarks on financial integration as a pivotal moment for the Eurozone, suggesting that enhanced financial cohesion will be crucial for sustaining economic growth. Per the full note [source], Guindos emphasized the need for deeper integration to bolster Europe's resilience against external shocks, which aligns with our view of a strengthening euro. With the ECB's commitment to maintaining accommodative monetary policy, we expect upward pressure on the euro, particularly against the USD. The consensus target for EUR/USD is 1.075, with a range reflecting differing outlooks on growth and inflation dynamics.