ECB's Potential December Rate Cut Hinges on Economic Conditions

According to BlockBeats, analysts Alain Durre and Hadrien Camatte from Natixis have indicated in a report that the European Central Bank (ECB) might proceed with a final 25 basis point rate cut in December. This decision is contingent upon a more significant slowdown in the labor market than anticipated, alongside inflation falling substantially below target due to declining energy prices and further appreciation of the euro. The analysts estimate a 60% probability of the ECB implementing this rate cut during its December meeting, which would set the terminal deposit rate at 1.75%. It is expected that the ECB will maintain its policy rate unchanged at its upcoming Thursday meeting, with the deposit rate remaining at 2.00%.