However, those odds could swing significantly depending on the numbers that we see for the Eurozone CPI data tomorrow. But after having seen the national breakdowns from last week, there's no strong suggestion that the ECB needs to get panicky and go with a 50 bps move instead.
Adding to that is the slightly disappointing Eurozone Q1 preliminary GDP figures, which was largely weighed down by flat growth in Germany. The supposed resilience in the region lies mostly with the peripheries at this point and with inflation pressures still weighing, there are still concerns surrounding the outlook in the months ahead.
Eurozone annual core inflation continues to run at a record pace, seen at 5.7% in March. The estimate for April is expected to match that, so it won't give policymakers too much comfort. But if we do see it come higher, that could trigger some last-minute debate on whether or not we will see a 50 bps rate hike this week instead.
On the flip side, if it does come in softer than expected, that could bolster the view that inflation pressures could start falling more meaningfully in the second half of the year. In turn, that should see rates fall alongside the euro in the lead up to the ECB on Thursday.
Unless the Eurozone CPI data does not tally with what we have seen from the national reports last week, we are likely to see the ECB stick with a 25 bps move this week on the balance of things.
There might be some policymakers arguing for a more hawkish take but I think the majority would be happy to go with 25 bps and reaffirm that past rate hikes are still taking some time to have an impact on the economy for now.
