What is the ECB waiting for before today's meeting decision

The euro rose to 4-month highs against the US dollar on Thursday, after European bond yields rose on Germany's proposed 500 billion euro Infrastructure Fund and the reform of borrowing limits.

German bond yields also rose as investors absorbed the expected additional borrowing to support debt reform, with 30-year yields (DE30YT=RR) jumping by as much as 25 basis points, and the yield on ten-year German treasury bonds (DE10YT=RR) rising by more than 30 basis points yesterday, its largest daily rise since the launch of the euro in 1999.

The European currency is up 4.3% this week and is on track for its best week since March 2009, although the policy decision from the European Central Bank later in the day will come under scrutiny, and a 25 basis point interest rate cut is widely expected, but the focus will be on the scope and pace of easing after that.

All eyes will be on the ECB when it announces its policy decision at 3:15 pm Egypt time, almost half an hour after the press conference of ECB President Christine Lagarde.

The European Central Bank has cut interest rates five times since June as inflation eased and economic growth faltered, but now prices are slowly approaching a level that no longer restricts economic growth.

Markets had expected by the beginning of this month that the European Central Bank would cut interest rates at least 3 times for the rest of this year, and there were about 82 basis points of interest rate cuts, and the first reduction will be implemented this week.

Now, the probability of interest rate cuts by 25 basis points has not changed today and is still fully calculated, however, the forecast has changed for the rest of the year and has become almost 63 basis points of interest rate cuts for the year as a whole.