Asset Manager: ECB Likely to Cut Rates by 25 Basis Points Next Week

According to reports, German asset management firm DWS economist Ulrike Kastens stated in a report that the European Central Bank (ECB) is likely to lower its deposit rate by 25 basis points to 3.00% next Thursday, rather than opting for a larger cut of 50 basis points. The economic outlook for the eurozone has worsened, and inflation improvements have exceeded expectations, but not enough to justify a more significant rate reduction.

Data from LSEG shows that the market currently estimates an 87% probability of a 25-basis-point rate cut by the ECB, compared to a 13% probability of a 50-basis-point cut.