BoA preview, not seeing much support for euro:
- We expect the ECB to hike 75 bps with a clear signal of more to come, in line with recent communication and market pricing. We argue it is too early for QT (quantitative tightening), but the language around APP (Asset Purchase Programmes) reinvestments is likely to change, preparing the ground for discussions. An announcement on punitive tiering or changing TLTRO (Targeted Long Term Refi Operations) terms seems likely to us, even if the details follow later.
- In FX, we do not believe the hawkish ECB steps and tone will be enough to support the EUR, given market expectations and remaining challenge