Traders Bring ECB October Rate Cut Into Play as Outlook Darkens
- Markets price 60% chance of cut next month after weak data
- Euro-area PMIs were lower, German Ifo fell more than expected
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Traders are growing increasingly confident the European Central Bank will cut interest rates again next month as evidence mounts the economy is weakening.
Money markets imply a roughly 60% chance of a quarter-point reduction in October, up from around 20% last week. The latest leg of the repricing was driven by US data that showed consumer confidence unexpectedly fell in September.