If you need a refresher, the total rate cuts priced in for the ECB this year at the end of December was 161 bps. Right now, it is standing at just 96 bps after the PMI data today. What a difference two months make, eh?

Meanwhile, the odds of an April rate cut have slipped further to just ~39%. And that is likely to be narrowed down further when we get to the March policy meeting in two weeks‘ time. It seems like traders are aligning with the narrative put out by major central banks, and not just for the Fed.

In the case of the ECB, this now sees a June rate cut as being the most plausible. The balance between the give and take for such pricing seems to be one that markets and the central bank can agree with currently.

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