They are sticking with the view that the ECB will begin delivering back-to-back rate cuts, but starting from December. A further weakening in the economic outlook is the main cause for the shift in their call, after having previously forecasting the ECB to deliver on 25 bps rate cuts every quarter until a terminal rate of 2.00% to 2.50% around the end of next year.

„We are moving to a faster normalization call, with the ECB to reach the same terminal rate of 2.00 to 2.50% six months earlier in mid-2025. We expect this more rapid easing cycle to be achieved with back-to-back 25 bp cuts from December, but we do not rule out a 50bp cut in December.“

But given the latest report that surfaced just a little over an hour ago here, they might just have to consider revising their call again.

This article was written by Justin Low at www.forexlive.com.