ECB 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.
What the desk is arguing
The desk interprets the ECB Consumer Expectations Survey as a clear signal of increasing inflation concerns among consumers, which could prompt the ECB to adopt a more hawkish stance. The notable rise in median inflation expectations, particularly the jump to 4.0% for the next 12 months, indicates that consumers are bracing for higher prices, a sentiment that could pressure the central bank to act decisively.
Additionally, the survey revealed a more negative outlook for economic growth, with expectations dropping to -2.1% for the next 12 months. This juxtaposition of rising inflation expectations against a backdrop of declining growth could complicate the ECB's policy framework, as it navigates the delicate balance between controlling inflation and supporting economic recovery.
Where it sits in our coverage
Our consensus target for EUR/USD is 1.075, with a range of 1.04 to 1.12. Notable firm targets include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) - citi: 1.08 (Mar26)
This view aligns with jpmorgan, which anticipates a stronger euro as inflation pressures mount, while bofa holds a more bearish stance, reflecting concerns over economic growth. The desk's target sits near the upper bound of the consensus range, indicating a more optimistic outlook on the euro's strength relative to peers.
How other firms see it
Firms like jpmorgan and citi are aligned in their expectations of a stronger euro amid rising inflation, suggesting a potential shift towards a tighter monetary policy from the ECB. Conversely, bofa remains cautious, projecting a weaker euro due to anticipated economic headwinds.
Traders should also keep an eye on the EUR/GBP dynamics, as shifts in ECB policy could have spillover effects on the Bank of England's decisions, particularly with inflationary pressures being a common theme across both central banks.
What the calendar says
With the CPI release on June 2 looming, traders should prepare for potential volatility in EUR/USD as the market digests the implications of consumer inflation expectations. This event could serve as a catalyst for further adjustments in market positioning ahead of the ECB's next policy meeting.
Key takeaways
- 01Median inflation expectations for the next 12 months rose to 4.0%, indicating heightened consumer inflation concerns.
- 02Economic growth expectations have turned negative, with a forecast of -2.1% for the next year.
- 03The ECB may face pressure to adjust its policy stance in response to rising inflation amid declining growth.
- 04Upcoming CPI data on June 2 could significantly impact market sentiment and positioning.
Market implications
Watch for EUR/USD to test levels around 1.075, particularly in response to the upcoming CPI data on June 2, which could validate or challenge the current inflation narrative.
PRESS RELEASE ECB Consumer Expectations Survey results – March 2026 28 April 2026 Compared with February 2026: median consumer perceptions of inflation over the past 12 months as well as median inflation expectations for the next 12 months and for three years ahead all increased significantly, while median inflation expectations for five years increased slightly; expectations for nominal income growth over the next 12 months remained unchanged, while expectations for spending growth over the next 12 months increased; expectations for economic growth over the next 12 months became more negative, while the expected unemployment rate in 12 months’ time increased; expectations for growth in the price of homes over the next 12 months increased, as did expectations for mortgage interest rates in 12 months’ time. Inflation In March, the median rate of perceived inflation over the previous 12 months increased to 3.5%, from 3.0% in February. Median expectations for inflation over the next 12 months and expectations for inflation three years ahead , which both stood at 2.5% in February, increased in March to 4.0% and 3.0% respectively.
Inflation expectations for five years ahead also increased in March, to 2.4%, from 2.3% in February. Uncertainty about inflation expectations over the next 12 months increased in March. Respondents in lower-income quintiles continued to report on average slightly higher inflation perceptions and short-horizon expectations than those in higher-income quintiles, a trend observed since 2023.
However, the broad evolution of inflation perceptions and expectations remained closely aligned across income groups, with all income groups reporting increased inflation perceptions and one year ahead expectations in March. Younger respondents (aged 18-34) continued to report lower inflation perceptions and expectations than older respondents (aged 35-54 and 55-70). Inflation results Income and consumption Consumers’ nominal income growth expectations over the next 12 months remained unchanged in March compared with February, at 1.2%.
Meanwhile, perceived nominal spending growth over the previous 12 months increased to 5.1%, from 4.6% in February. Expected nominal spending growth over the next 12 months increased to 4.1%, from 3.5% in February, the highest level since May 2023, with respondents in the lowest three income quintiles expecting slightly higher spending growth expectations than those in the highest two quintiles. Income and consumption results Economic growth and labour market Economic growth expectations for the next 12 months became more negative, decreasing to -2.1% in March, from -0.9% in February.
Also, expectations for the unemployment rate 12 months ahead increased to 11.3% in March, from 10.8% in February. As observed in previous months, lower-income households expected the highest unemployment rate 12 months ahead (13.7%), while higher-income households expected the lowest rate (9.7%). Consumers continued to expect the future unemployment rate to be slightly higher than the perceived current unemployment rate (10.6%), suggesting a broadly stable labour market outlook.
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