Results of the ECB Survey of Professional Forecasters for the second quarter of 2026
At a Glance
The desk anticipates a cautious outlook for the eurozone economy, driven by upward revisions in inflation expectations and downward adjustments in GDP growth forecasts. Per the full note from the ECB Survey of Professional Forecasters, headline inflation expectations for 2026 have risen to 2.7%, while real GDP growth has been revised down to 1.0%. This divergence suggests a tightening of monetary policy may be on the horizon, especially with the ECB's next macroeconomic projections due on June 11, 2026.
Key Takeaways
- 01ECB inflation expectations for 2026 revised up to 2.7%, indicating persistent inflationary pressures.
- 02Real GDP growth expectations downgraded to 1.0% for 2026, highlighting economic challenges.
- 03Upcoming ECB macroeconomic projections on June 11 will be critical for shaping market sentiment.
- 04Diverging views among firms suggest a polarized outlook for EUR/USD.
Full Analysis
What the desk is arguing
The desk frames this as a pivotal moment for the eurozone, where inflationary pressures are expected to persist despite a slowing economy. According to the ECB's latest survey, expectations for headline HICP inflation have been revised up to 2.7% for 2026, indicating that inflation remains a key concern for policymakers.
Real GDP growth expectations have been downgraded to 1.0% for 2026, reflecting the adverse impacts of rising energy prices linked to geopolitical tensions. This juxtaposition of rising inflation against declining growth could compel the ECB to adopt a more hawkish stance in upcoming meetings.
Where it sits in our coverage
Our consensus target for EUR/USD stands at 1.075, with a range between 1.04 and 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) - citi: 1.12 (Mar26)
This view aligns closely with jpmorgan, which shares a similar outlook on the euro's trajectory, while bofa presents a more bearish stance, sitting at the lower bound of our range.
How other firms see it
Firms like citi and jpmorgan are aligned in anticipating a stronger euro, reflecting confidence in the ECB's ability to manage inflation. Conversely, bofa holds a contrary view, projecting a weaker euro amid economic headwinds.
Traders should keep an eye on the EUR/USD pair, as its movements will likely reflect the evolving dynamics of ECB policy and inflation expectations. Additionally, the upcoming ECB macroeconomic projections will be crucial in shaping market sentiment.
What the calendar says
With the next ECB macroeconomic projections scheduled for June 11, 2026, traders should prepare for potential volatility in EUR/USD as these insights could significantly influence market expectations regarding future monetary policy adjustments.
Market Implications
Watch for EUR/USD to react to the upcoming ECB macroeconomic projections on June 11, as these could provide clarity on the central bank's policy direction amid rising inflation and slowing growth.
What changed vs prior statement
- 01Inflation expectations revised upward for 2026-2027 due to Middle East war energy impacts, contradicting de Guindos's cautious stance.
- 02GDP growth forecasts downgraded 0.2pp for 2026, reflecting geopolitical uncertainty de Guindos warned about in his interview.
- 03Wage growth expectations increased to 3.3% for 2026, signaling persistent labor cost pressures requiring careful monetary policy calibration.
From the original
PRESS RELEASE Results of the ECB Survey of Professional Forecasters for the second quarter of 2026 4 May 2026 Headline and core HICP inflation revised up in the near term, while remaining unchanged further out Real GDP growth expectations revised down for 2026 and 2027, but unchanged thereafter Unemployment rate expectations unchanged Respondents’ expectations for headline inflation, as measured by the Harmonised Index of Consumer Prices (HICP), were 2.7% for 2026, 2.1% for 2027 and 2.0% for…
Related speeches
4 itemsECB Consumer Expectations Survey results – March 2026
The desk views the recent ECB Consumer Expectations Survey results as a significant indicator of rising inflationary pressures within the Eurozone. Per the full note [source], median inflation expectations for the next 12 months surged to 4.0%, up from 2.5% in February, suggesting a shift in consumer sentiment that could influence ECB policy decisions. With the upcoming CPI release on June 2, traders should closely monitor how these consumer expectations might affect the central bank's stance. Our consensus target for EUR/USD remains at 1.075, reflecting a cautious outlook amidst these inflationary signals.
Eurozone economy remains resilient
The Eurozone economy showcases resilience, bolstered by unexpected growth despite geopolitical and energy pressures, positioning the European Central Bank (ECB) for potential interest rate hikes. Per the full note from ing-think, GDP expanded by 0.4% in Q2 2026, surpassing many expectations, while inflation is projected to remain above 3% until Spring 2027. As the ECB considers a September tightening, the potential for further rate increases looms, emphasizing the evolving dynamics that could influence the euro. Our coverage highlights a consensus stance towards the euro appreciating against the dollar, as traders price in these monetary policy shifts.
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