ECB’s Knot: The ECB may well need to keep rates on hold for some time

• We can’t exclude another ECB rate cut.
• The ECB rate currently at neutral is a good place to be.
• Inflation risks are currently two sided.

This is (K)not something new. The ECB is now on pause until September at very least as they gather more information on the economy and inflation. The market is currently assigning more probabilities for a 25 bps cut in December.

This article was written by Giuseppe Dellamotta at www.forexlive.com.