ECB MINUTES REVIEW: All signs continue to point to a June cut

Analysis details (13:10)

• As is often the case, given the dated nature of the release, the account of the ECB's March meeting passed with little in the way of fanfare. The topline summary was that there had been further progress on all three elements that shape the ECB's reaction function. This warranted increased confidence that inflation was on track to reach the ECB’s target in a timely and sustainable manner. However, more data and evidence were needed for the Governing Council to be sufficiently confident of this given that questions remained about the sustainability of the disinflationary process, particularly in services and domestic inflation. It was noted that the Governing Council would have significantly more data and information by the June meeting, especially on wage dynamics. Accordingly, whilst it was noted that the case for considering rate cuts was strengthening, it was judged to be premature to discuss rate cuts at the March meeting. Overall, given the volume of rhetoric heard from the GC since the meeting, little in the way of fresh insight was gained. As such, market pricing for a June cut remains at 100%.

04 Apr 2024 - 13:10- Fixed IncomeResearch Sheet- Source: Newsquawk