Insightful Word
  • Investing
  • Stock
  • Economy
  • Politics
  • Investing
  • Stock
  • Economy
  • Politics
No Result
View All Result
Insightful Word
No Result
View All Result
Home Economy

Here’s what investors can expect from the ECB this week

admin by admin
December 8, 2024
in Economy
0
Here’s what investors can expect from the ECB this week
0
SHARES
4
VIEWS
Share on FacebookShare on Twitter

Investing.com — The European Central Bank (ECB) is widely expected to cut interest rates by 25 basis points to 3% during its December 12 meeting, UBS analysts highlighted in a recent note.

The bank explained that the decision will likely be influenced by updated macroeconomic projections, which are expected to show inflation reaching the 2% target by early 2025.

UBS forecasts the ECB will continue cutting rates by 25 basis points at subsequent meetings in January, March, April, and June, bringing the deposit rate to a neutral level of 2% by mid-2025. 

This gradual approach is said to reflect the assumption that Eurozone labor markets will remain resilient, meaning wage growth will only decline slowly. 

“However, this argument cuts both ways: If labour markets were to weaken more visibly, wage growth were to come down much faster, or GDP were to perform weaker than our base case scenario, the ECB would have to cut faster and below neutral,” added UBS.

The ECB is also expected to unveil updated macroeconomic projections, including forecasts for 2027, for the first time. 

UBS predicts the 2024 inflation forecast will be revised slightly lower to 2.4%, while the 2026 headline inflation forecast will rise to 2.0%. The investment bank believes GDP growth projections are likely to remain subdued, with a modest uptick expected in 2026 due to improved technical assumptions.

Another key focus of the meeting will be the ECB’s forward guidance. UBS anticipates the ECB will maintain its data-dependent approach but may drop references to keeping rates “sufficiently restrictive,” signaling a shift in tone as inflation trends toward the target.

UBS also flagged potential impacts on bond and currency markets. They project German 2-year yields to decline further and maintain a medium-term bearish outlook on the euro, targeting EUR/USD at 1.04 by the end of 2025. 

However, they suggested fading any near-term EUR rebounds toward 1.07, noting vulnerability to U.S. policy shifts under the incoming Trump administration.

 

This post appeared first on investing.com

Previous Post

Bitcoin ETF options launch spurs record inflows

Next Post

Could US tariffs ramp-up deflationary forces in Europe?

admin

admin

Next Post
Could US tariffs ramp-up deflationary forces in Europe?

Could US tariffs ramp-up deflationary forces in Europe?

Trending News

EU countries approve new 4.2 billion euros payment for Ukraine

EU countries approve new 4.2 billion euros payment for Ukraine

December 9, 2024
France’s Barnier entrusts budget dilemma to little-known duo

France’s Barnier entrusts budget dilemma to little-known duo

September 22, 2024
Investing.com stocks of the week

Investing.com stocks of the week

October 26, 2024
Subscribe to Insightful Word


    Recent News

    Hang Seng, Nifty lead Asian markets higher on Monday

    Hang Seng, Nifty lead Asian markets higher on Monday

    May 12, 2025
    US, China strike trade deal: key tariffs reduced, but some remain

    US, China strike trade deal: key tariffs reduced, but some remain

    May 12, 2025
    US stock futures rally as US and China agree to a rollback in tariffs

    US stock futures rally as US and China agree to a rollback in tariffs

    May 12, 2025
    Amazon, Tesla drive Magnificent Seven surge on US-China trade deal

    Amazon, Tesla drive Magnificent Seven surge on US-China trade deal

    May 12, 2025

    Recent News

    Hang Seng, Nifty lead Asian markets higher on Monday

    Hang Seng, Nifty lead Asian markets higher on Monday

    May 12, 2025
    US, China strike trade deal: key tariffs reduced, but some remain

    US, China strike trade deal: key tariffs reduced, but some remain

    May 12, 2025

    Latest News

    • Hang Seng, Nifty lead Asian markets higher on Monday
    • US, China strike trade deal: key tariffs reduced, but some remain
    • US stock futures rally as US and China agree to a rollback in tariffs

    About Insightful Word

    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools
    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools

    Copyright © 2025 Insightfulword.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Stock
    • Economy
    • Politics

    Copyright © 2025 Insightfulword.com. All Rights Reserved.