European Central Bank Vice President Luis de Guindos said that given the recent slowdown in inflation in the eurozone, the ECB will sooner or later start lowering interest rates. However, he did not provide any clues about when this process will begin, saying that the ECB will begin easing monetary policy "when it is sure that inflation will reach the target level of 2%."
Meanwhile, some analysts believe that weak data on economic growth and inflation in the eurozone, due to be published on Wednesday, may strengthen expectations about future ECB rate cuts. According to Nomura experts, GDP data will confirm that the eurozone is in recession, while indicators for headline and core inflation are likely to be lower than current consensus estimates. ECB euro short-term rate forwards priced in 1,46% of rate cuts in 2024 from around 1,4% late on Friday. While GDP remains weak and inflation continues to slow down, it is possible to cut rates at the April ECB meeting, although it is worth recognizing that the risks are inclined to a later step.