-
The European Central Bank remains on an “easing path” when it comes to the interest rates, according to ANZ’s Head of G3 Economics Brian Martin – but ANZ Research has pulled back its expectations of cuts this year to just two more.
Speaking to ANZ’s 5 in 5 with ANZ podcast, Martin said now expects the euro area central bank to move lower on rates in September and December – down from a previous forecast of three additional cuts in 2024.
Euro-area inflation data showed prices grew 2.6 per cent in May, compared to 2.4 per cent in April. Wage growth data rose 4.7 per cent in the first quarter of 2024.
ANZ Research has therefore dialled back its expectations for euro-area rate cuts, Martin told 5 in 5, and “now anticipates two 25 basis-point rate cuts in the second half of this year”.
“In total that would mean that you’re getting three rate cuts this year,” he said. “The ECB is definitely, we think, embarking on an easing path. But it's not going to rush into rate cuts.”
Keep up to date with 5 in 5
5 in 5 with ANZ is a daily financial markets podcast featuring the latest news, trends and insights from ANZ economists based around the world.
Hosted by New Zealand-based journalist Bernard Hickey, 5 in 5 with ANZ explores market trends, insights, and data releases in a way that arms listeners with the information they need to start the day.
ANZ’s International network provides a unique opportunity to connect listeners with insights from specialists on-the-ground. It features the voices of ANZ’s team of economists as well as foreign exchange, rates and commodities experts.
Episodes drop weekdays at about 6am Australian eastern standard time, and you can find them on Apple, Spotify, Substack and more.
You can click here to find out more and listen to the latest episode.
In June, the ECB became one of the first major central banks to lower official interest rates in this economic cycle, moving 25 basis points to 3.75 per cent. The bank cut rates despite also revising their inflation forecasts higher for 2024 and 2025.
Share
 |
Receive insights direct to your inbox |
Related articles
-
Further ECB decisions will be guided by inflation data, ANZ's Brian Martin says on podcast.
2024-06-11 00:00 -
The trade relationship between the two locations has significant potential, even if it seems like an unlikely partnership.
2024-05-29 00:00 -
As conditions continue to shift in its favour, we could very well be on the precipice of the Indian century.
2024-05-22 00:00
This publication is published by Australia and New Zealand Banking Group Limited ABN 11 005 357 522 (“ANZBGL”) in Australia. This publication is intended as thought-leadership material. It is not published with the intention of providing any direct or indirect recommendations relating to any financial product, asset class or trading strategy. The information in this publication is not intended to influence any person to make a decision in relation to a financial product or class of financial products. It is general in nature and does not take account of the circumstances of any individual or class of individuals. Nothing in this publication constitutes a recommendation, solicitation or offer by ANZBGL or its branches or subsidiaries (collectively “ANZ”) to you to acquire a product or service, or an offer by ANZ to provide you with other products or services. All information contained in this publication is based on information available at the time of publication. While this publication has been prepared in good faith, no representation, warranty, assurance or undertaking is or will be made, and no responsibility or liability is or will be accepted by ANZ in relation to the accuracy or completeness of this publication or the use of information contained in this publication. ANZ does not provide any financial, investment, legal or taxation advice in connection with this publication.