ECB to not hint at any major policy changes for now – Societe Generale

<p>Societe Generale says that the ECB won't rock the boat today as the central bank is expected to communicate a more neutral language on rates. They should acknowledge recent progress on inflation but will wait before declaring victory on that front just yet. The firm also sees the ECB revising their projections to see inflation closer to target in 2025, which paves the way for rate cuts in 2H 2024.</p><p>Adding to that, the firm argues that now is perhaps a good time for the ECB to pre-announce PEPP tapering for March/April, conditional on market
conditions.</p><p>For some context, markets have already priced in a rate cut for April next year with ~56% odds of a March move by the ECB. So, Societe Generale's view on rates is more on the conservative side as compared to what traders have already priced in for the time being.</p>

This article was written by Justin Low at www.forexlive.com.