Eurozone retail sales, released yesterday, showed a nice pick-up in March, endorsing the recent narrative of an improving economic outlook. This morning, Germany released March industrial production figures, which were slightly better than expected but still down 3.3% year-on-year.

While the current slew of economic releases is not influencing markets, it will help shape the European Central Bank’s messaging as policymakers prepare to cut rates in June. The indication from members is that this won’t be a rapid, straight-line easing cycle. The unchanged rate cut expectations (75bp by year-end) seem to mirror ongoing conditionality and data dependency moving ahead and look unlikely to be steered significantly in the near term.

Today, we’ll hear from Governing Council members Pierre Wunsch and Pablo de Cos, who yesterday reiterated the prospect of a June cut but more uncertain future path. Aside from any spillover from the Riksbank decision this morning, EUR/USD volatility may be capped this week, and the pair should still find decent support around 1.0700.

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