Major brokerages, including Goldman Sachs and JPMorgan, now expect the European Central Bank to deliver a quarter-point cut at its October 17 meeting, on the back of recent data showing economic weakness and slowing inflation.
Market pricing now reflects around a 90% chance of such a rate cut, which would follow reductions at the ECB's June and September meetings, as the data pushes policy makers to focus more on growth and less on price pressures.
Euro zone inflation dipped below 2% for the first time since mid-2021 in September, according to data yesterday.
Last week surveys showed euro zone business activity contracted sharply and unexpectedly in September, as the bloc's dominant services industry flatlined and a downturn in manufacturing accelerated.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
Sources told Reuters that ECB policy doves are preparing to fight for an October rate cut - though this would likely meet resistance from more conservative peers - a turnaround from the aftermath of the ECB's September meeting when they saw an October move as unlikely.
