June Euro futures traded near unchanged, potentially ending a 3-day rise as the market looks ahead to the upcoming European Central Bank meeting. The euro tested a high of 1.1576 during the session before fading back to a 0.01% gain. Markets are widely pricing in a 25 bps rate hike from the ECB, which would elevate the deposit rate to 2.25% following a pause that began in April. The central bank faces a complex economic environment, balancing re-accelerating consumer prices against a weakening economic backdrop. Eurozone CPI rose to 3.2% in May, driven heavily by a 10.9% jump in energy costs, while Q1 GDP contracted by 0.2%. Market participants will closely monitor ECB President Christine Lagarde's press conference for insights into how the bank plans to navigate the tension between rising inflation and slowing economic output.
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