3 cuts by December now at 43.9% odds based on futures, higher than any other scenario. Yesterday there was a 17% chance of no cuts through year end. https://t.co/garWbaeBcO
Money Markets Increase Expectations for ECB Rate Cut, Price in 90% Chance of 25-Basis-Point Reduction by March 2026 💶📉
Odds of 50 basis points of cuts by the October meeting are now above 50%. They were at 13% yesterday. https://t.co/ApueaJtEvM
Money-market pricing shifted sharply in Friday trading, with futures now assigning a 90% probability that the European Central Bank will lower its deposit rate by 25 basis points at its March 2026 meeting. The probability had been around 65% before the latest U.S. economic data were released. Investors also pulled forward expectations for the first move. Contracts now show a 60% likelihood of a quarter-point reduction by December 2025, compared with 50% before the data. Odds that the ECB will deliver a cumulative 50 basis points of easing by its October 2025 meeting have risen to above 50%, from just 13% the previous day. Further out, futures imply a 43.9% probability that the central bank will cut rates three times by December 2025, eclipsing all other scenarios and contrasting with yesterday’s 17% chance that policy would remain unchanged through year-end. The repricing underscores traders’ conviction that slowing growth and cooling inflation will prompt the ECB to begin loosening policy sooner than previously expected.
