Traders believe the ECB’s rate-cut floodgates have been opened

Traders believe the ECB’s rate-cut floodgates have been opened

By Ez-XBRL Team 18 October, 2024
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18 October 2024

Traders increased bets on faster European Central Bank (ECB) rate cuts after the ECB’s second consecutive cut, reducing the deposit rate by 25 basis points to 3.25%. The move, driven by worsening economic conditions and easing inflation, marked the first back-to-back cuts since 2011. While ECB chief Christine Lagarde stressed data-dependence, traders saw little resistance to market expectations, pricing in a possible 50 bps cut in December. This pushed the euro down further, with markets now speculating on the size of the next cut.

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