As expected after the previous EU inflation reading, the European Central Bank lowered interest rates by 0.25 percentage points, from 3.65% to 3.40%.
Previous statements from the ECB’s chair were not clear, yet the market valuations of FRA contracts indicated that the market expected two rate cuts of 0.25 percentage points each to be implemented within the year, with the first cut delivered today.
A conference conducted by Christina Lagarde will take place at 2:45 pm, the tone of which could shape future market expectations. Even though hard predictions are not expected, a softening of rhetoric may suggest that a December cut is practically a foregone conclusion and the monetary policy easing cycle will continue after the New Year. As always, key to the ECB’s future decisions will be the readings over the coming months on inflation, unemployment, and PMI indices.
Piotr Bawolski, Director of Strategic Customers, Michael / Strom Brokerage House
Source: https://managerplus.pl/ebc-obniza-stopy-procentowe-w-ue-39872
