EUR: Too much ECB easing priced for 2024 – ING
12.09.2024, 09:31

EUR: Too much ECB easing priced for 2024 – ING

The ECB announces its rates decision today at 1415CET. The deposit rate is widely expected to be cut by 25bp to 3.50%, while in a technical adjustment, the Main Refinancing Rate will be cut by 60bp, ING’s FX strategist Chris Turner notes.

EUR/USD to enjoy a modest bounce towards the 1.1080 area

“Our core view today is that the ECB will not offer the market enough information (be it forward guidance or new economic forecasts) to justify the roughly 11bp of easing priced in for the 17 October meeting. Our house view remains 25bp rate cuts today and 12 December. If we're right, EUR/USD should be able to enjoy a modest bounce towards the 1.1080 area.”

“Elsewhere, we have a speech from outgoing Swiss National Bank President Thomas Jordan at 1625CET today. He's speaking at a Swiss Bankers Association event. It is not clear he will stray near monetary policy in his speech, but we are very surprised to see the market pricing 32bp of rate cuts for the 26 September meeting.”

“We very much doubt it would be cut by more than 25bp since with an already very low policy rate (1.25%) it has far less room to cut. In addition, the economy has been performing quite well. EUR/CHF could rally today if the short end of the euro curve backs up on the ECB today. But we imagine it would meet sellers against in the 0.9450 area.”

 

 

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