Lagarde
Barclays issued a note predicting that the ECB will cut the ECB by 25 basis points on October 17. They are behind the curve in that as the market has turned dramatically in the last couple of weeks and now place a 94% chance of a cut. . This is despite previous hints from the European Central Bank.
Barclays expects steady cuts of 25 basis points at each meeting until the key interest rate reaches 2% from 3.75% currently. This is also priced in by the market by next June (with risks to it a bit sooner).
Another old hand (and ForexLive fan) also chimed in today to demand discounts. And Vitor Constancio – who was Draghi’s first deputy at the European Central Bank – too See October cut.
Inflation in France fell to 1.2 percent from 1.8 percent in August. In Spain, the rate fell to 1.5 percent from 2.3 percent in August. These figures indicate that eurozone inflation in September was just below 2. Given the weak Eurozone PMI, the ECB should cut interest rates again in October.
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