ECB preview: not quite there yet

We expect the ECB to remain on hold in April despite a further decline in headline inflation to 2.4% in March. Rather we expect the ECB to reiterate its long-held view that it would need to see further evidence that wage pressure is moderating . The continuing stickiness of services inflation is likely to be stressed in this context . That said, we also expect the ECB to provide some hints that the baseline scenario remains consistent with a start of the cutting cycle by June . There will be no forward guidance provided about the speed at which the ECB will continuing to ease its policy stance ( i.e. how many cuts to expect this year). The ECB rather will stress the on-going data-dependency of its future decisions, implying that it will continue to decide meeting-by-meeting, based on the data available, whether to cut or not. We continue to expect a cut at every meeting, implying a total of 125bp cuts this year.