JPMorgan now sees the ECB cutting rates by 50 basis points in December

[forex4you]

JPMorgan now sees the ECB cutting rates by 50 basis points in December

The market is pricing in just a 20% chance of a large ECB rate cut on December 12 but JPMorgan thinks that's not enough. They're out with a new note calling for 50 bps.

Today's prelim eurozone core CPI reading for December was 2.7% compared to 2.8% expected. The headline number creeped up to 2.3% from 2.0% but the ECB's Villeroy was quick to dismiss it.

"We have some good news, inflation has slowed and is going toward our
target," he said in Dijon on Friday. "We will therefore probably be able
 to continue to lower interest rates."

He added that "in our projections -- beyond monthly variations -- we are confident that
we will reach our target next year, and probably in the first half of
next year."

The ECB's deposite facility rate is at 3.25%.

                This article was written by Adam Button at www.forexlive.com.

Source: JPMorgan now sees the ECB cutting rates by 50 basis points in December

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