The report released this week promises that eurozone inflation levels will continue to be above 3% over the next year Today, the ECB is likely to tend towards raising interest rates one last time by 25 basis points, Where the odds of a 25 basis point rate hike are now around 63% and this is considered a big shift in expectations compared to last week which was the outlook for a rate hike of just 21%.
The outlook remains tight and today's euro currency will be the main focus along with bond yields, but even if the ECB can raise interest rates, we expect that markets will see it as the decision to raise interest last.
And so there may be a momentarily bullish reaction at the time of the news and then back the rollbacks again especially if there are negative revisions to the economic outlook.
Thus if economic data continues to falter as it has in the past few months, interest rate cuts may soon start to appear in the picture, no matter what policymakers may try to say or deny.
Let's wait for the decision today and the economic outlook for the coming period.
It's also worth noting that today we have a set of important data from the US economy:
- PPI
- Retail sales
- Weekly unemployment complaints rates
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