President Mario Draghi’s final meeting as head of the ECB last week saw the Governing Council keep policy unchanged. Recent data on the eurozone economy have been quite weak and inflation continues to fall, with the annual harmonised inflation rate dropping to 0.8% in September, well below the ECB’s 2% target. This is in line with the trend in other markets, such as the UK and US, which have also seen some rowing back on rate cut bets. Meanwhile, the market does not see ECB rates starting to rise until mid-2022 and then only very slowly. Futures contracts show three-month money market rates remaining negative until 2025.

Source: Irish Examiner October 29, 2019 05:15 UTC