Strategists at ING note that French President Emmanuel Macron has stressed the need for debt sharing in order to deal with the Covid-19 crisis and keep the EU project alive.

"In his “moment of truth” speech, French President Emmanuel Macron further underscored the need for debt mutualisation (coronabonds) in order to deal with the Covid-19 crisis and keep the EU project sustainably and credibly alive. "

"Still, opposition from northern EU states remains in place and the bar is set high for a solution to be agreed at the EU leaders video conference call next Thursday."

"Even without a coronabond, our economists expect the EU to continue muddling through and eventually come up with a face-saving solution."

"This in our view should prevent any large risk premia being built into the euro during the current Covid-19 crisis and risk premia driven euro downside (even with the help of the European Central Bank, which should soften the BTP´s downside via the ECB’s Pandemic Emergency Purchase Programme)."

"We thus continue to see higher EUR/USD into the summer months as the Federal Reserve's large balance sheet expansion weighs on the dollar."