Markets are waiting for ECB to spill the beans – Danske Bank
17.10.2024, 09:56

Markets are waiting for ECB to spill the beans – Danske Bank

Focus today is on the ECB meeting, where we expect the ECB to deliver yet another rate cut of 25bp, bringing the deposit rate to 3.25%. Market expectations are supported by the recent weaker-than-anticipated growth indicators, as well as a decline in inflation, Danske Bank’s economist Sofie Pedersen notes.

Focus turns to the ECB

“We expect that the ECB sticks to the 'meeting-by-meeting' and 'data dependent' approach that it has been following in the past few quarters. Ahead of the meeting, we receive the final HICP inflation data, which will allow us to see how the LIMI measure of domestic inflation fared in September, which is an important input for the ECB.”

“US September retail sales and industrial production data as well as the weekly jobless claims are due for release in the afternoon. Retail sales will provide the markets with the latest hard evidence of the strength of the US consumer. Initial jobless claims from the week ending 12 October will for the first time include the impact of Hurricane Milton, which likely distorted the data upwards especially in Florida.”

“Overnight we get, the September inflation in Japan. The figure likely declined sharply from 2.8% in August as an early Tokyo release also indicated. BoJ's preferred measure of inflation stood at 2.8% in August and should remain above the 2%-target. Core price pressures have largely aligned with 2% inflation recently and with the October yen slide in mind, we still see an opening for another BoJ hike in either December or January after the dust has settled upon the general election on 27 October.”

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