MUFG(US:MUFG) 智通财经网·2025-10-28 07:29Core Viewpoint - The European Central Bank (ECB) is expected to maintain its current interest rates in the upcoming meeting, with market participants uncertain about future rate cuts, particularly in 2026, amid mixed economic signals and geopolitical factors [1][2][3]. Economic Indicators - Recent economic data indicates that the Eurozone is regaining growth momentum, with a notable improvement in the Purchasing Managers' Index (PMI) reaching a 17-month high of 52.2, despite concerns over political instability in France and weaker data from Germany [3][10]. - The inflation rate is hovering near the ECB's target, and the current interest rates are considered to be on a neutral trajectory, which has alleviated concerns regarding a downturn in Eurozone economic activity [3]. Market Expectations - The probability of the ECB restarting a rate cut cycle in 2026 has decreased to slightly below 50%, as traders reassess their positions following recent economic developments and statements from President Trump regarding trade agreements with China [2]. - MUFG's economist Cook maintains a forecast for further monetary easing by the ECB in 2026, citing potential fiscal stimulus from Germany and ongoing global trade uncertainties as factors that could keep inflation below the ECB's target [2][10]. Future Outlook - The ECB's upcoming meeting is anticipated to be a "low-key monetary policy meeting," focusing on inflation risk assessments and the implications of forthcoming economic data releases, including the preliminary GDP figures for Q3 and inflation data for Germany and the Eurozone [3]. - Cook predicts that the ECB may consider reinitiating rate cuts if inflation remains below the 2% target and the labor market shows signs of weakness, particularly in the context of a stronger Euro impacting import prices [10].