Continued slowdown in US inflation, deterioration in investor confidence in the eurozone, resilience of Asian exports of technology products… What to remember from the news this week!
The ECB cut its main policy rate, the deposit facility, from 3.75% to 3.50% at its meeting on September 12. This is the second rate cut this year, confirming the easing of price pressures.
We believe the central bank should remain on this downward trajectory given the slowdown in wage growth and inflation. Although we expect two more rate cuts this year, we believe that future monetary policy decisions will depend on the evolution of macroeconomic data and that the ECB will closely monitor activity in services. The decline in oil prices and the appreciation of the euro – which makes imports from outside the European Union cheaper – should help the ECB fight inflation.
In the future, the central bank may look at any slowdown in economic activity as well as inflation data before making monetary policy decisions.
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