Croatia on-board with EUR area

What's new?

The Adriatic country of 3.9 million people will join soon the euro area after reports due Wednesday will be assessed by the ECB and the European Union’s executive arm. Based on appraisals of factors including inflation and public debt, officials in Brussels will issue a recommendation to national governments on whether to allow Croatia to adopt the euro on Jan. 1, 2023.

Governing Council member Ignazio argues for orderly rate hikes

Particular attention will have to be paid to make sure that the monetary policy normalization process takes place in an orderly manner to prevent the emergence of any market fragmentation. Christine Lagarde has laid out a roadmap to exit negative rates with quarter-point hikes in July and September after the cessation of bond purchases. Hawkish colleagues have begun airing the need for even more aggressive action, as pursued this month by the US Federal Reserve. Some E.U countries such as Spain or Italy might be the first to feel the pain of rate hikes. German - Italy 10Y spread widen to 2.03% from 1.3% in January

What’s in the pipe?

Cleveland Fed President Loretta Mester discusses the economic outlook Thursday
US May employment report Friday
The UN’s Food and Agriculture Organization releases its monthly food price index at a time of maximum concern about global supplies on Friday