ECB expected to cut rates, focus on how many more cuts

From Investing.com: 2024-06-03 06:52:00

The ECB is expected to cut rates after a long wait, with markets pricing in a 96% chance of a 25-bps cut on Thursday. Despite higher CPI data, markets anticipate a cut due to comments from ECB members leading up to the meeting. The decision is driven more by easing financing conditions than economic necessity. ECB may adopt a gradual approach to avoid overtightening and economic distress. ECB members indicated that one or two cuts won’t make much difference. Focus will be on how many cuts are in the pipeline, with expectations for at least two cuts for the remainder of the year. Markets will closely watch Lagarde’s comments after the meeting for further guidance. A rate cut could weigh further on the euro but support European equities.

Read more at Investing.com: ECB Preview: A Cut Is Almost Certain, but How Many More Should We Expect??