Event risk:

-Final service PMI (3rd), EZ Ret. Sales (4th), Ge Fact. Orders (7th), Ge Ind. Prod., EZ Final 1Q & ZEW Surveys (8th), Ge Trade, Ge 1Q Lab. Costs (9th)
-ECB meeting and forecast updates (10th) Eurogroup Meeting (17th), EC Summit (24th-25th)


Bias:

-EC announces this week that it would suspend the debt restrictions within the Maastricht Treaty Growth and Stability Pact until 2023 and so allow member states to push aside deficit and debt to GDP restrictions during the post pandemic recovery. This will allow for further national level fiscal support to continue in addition to the soon to be ratified and then disbursed Recovery Fund.
As outlined last week the Recovery Fund should gain a boost in ratification at the June 24-25 EC Summit so that the major Eurozone states will be able to further boost their economic support.
-The EU vaccination program continues to progress well after its stuttering start and so the surges in survey optimism should begin to feed into hard data as the regional recovery gains more traction into mid-2021.
That should allow for a period of momentum outperformance, if not nominal activity, that should lift both the Westpac Data Pulse for the region and EUR.
-Next week’s ECB meeting should provide important projection updates and likely affirm a slowing of the recently increased PEPP pace, but not its limit.
Dips in EUR/USD should be well supported as it defines a higher 1.20-1.25 range.