Core Points - The Eurozone's annual inflation rate for October is reported at 2.1%, down from 2.2% in September, supporting the European Central Bank's decision to maintain interest rates [1] - European stock markets showed a cautious trading environment with mixed earnings reports from several well-known companies, leading to a decline in major indices [1] Group 1 - The European Central Bank's decision to keep interest rates unchanged is validated by the decrease in the inflation rate [1] - The Eurozone's inflation rate decrease indicates a potential easing of economic pressures [1] Group 2 - European stock indices closed lower, with the FTSE 100 down by 0.44%, CAC 40 down by 0.44%, and DAX down by 0.67% [1] - The mixed earnings reports from major companies contribute to the overall cautious sentiment in the market [1]

Core Viewpoint - The European Central Bank (ECB) has decided to maintain interest rates at 2%, indicating a stable policy stance amid economic resilience in the Eurozone, with no expected rate cuts in December as previously anticipated by Barclays and Bank of America [1][2] Group 1: ECB's Current Policy - The ECB has kept the key deposit rate unchanged for the third consecutive time, with the last rate cut occurring in June [1] - The ECB stated that the current policy is in a "good state" as economic risks diminish and the Eurozone shows resilience in the face of uncertainty [1] - Preliminary growth data for the Eurozone indicated a 0.2% quarter-on-quarter growth in Q3, which exceeded expectations and reinforced the ECB's decision to maintain rates [1] Group 2: Market Expectations - Barclays and Bank of America have revised their forecasts, no longer expecting a 25 basis point rate cut in December, with Barclays projecting rates to remain unchanged until the end of 2026, while Bank of America anticipates a cut in March 2024 [1] - The consensus in the market suggests that the likelihood of an ECB rate cut in December is extremely low, nearly zero [2] - Multiple institutions, including Goldman Sachs and UBS Global Wealth Management, have reiterated their expectations that the ECB will keep rates unchanged in the foreseeable future [1]

Core Points - The European Central Bank (ECB) decided to keep the key deposit rate unchanged at 2%, marking the third consecutive meeting without a rate change since the last cut in June, when the inflation rate in the Eurozone reached the target of 2% [1] - The ECB stated that inflation remains close to the medium-term target of 2%, and the assessment of the inflation outlook has largely remained unchanged [1] - Despite a challenging global environment, the economy continues to grow, supported by a strong labor market and robust private sector balance sheets [1] - The ECB warned of uncertainties in the outlook, particularly due to ongoing global trade disputes and geopolitical tensions [1] - Eurozone inflation rose slightly to 2.2% in September, primarily driven by an increase in service prices, leading economists to suggest that the ECB is likely to adopt a cautious approach regarding interest rate adjustments [1] Economic Data - Preliminary data showed that the Eurozone's economy grew by 0.2% quarter-on-quarter in the third quarter, which was above expectations and reinforced the ECB's decision to maintain interest rates [3] - The ECB reiterated its approach of making interest rate decisions based on data and meeting-by-meeting assessments [3] - ECB officials indicated that the rate-cutting cycle is nearing its end, with comments suggesting that there is no immediate need to adjust policies unless significant changes occur [3] - A survey conducted in mid-October revealed that the majority of economists expect the ECB to keep the deposit rate unchanged for the remainder of the year, with 57% of surveyed economists predicting that rates will remain stable until the end of 2026 [3]

Core Viewpoint - The European Central Bank (ECB) is satisfied with the current borrowing costs and is expected to maintain the deposit rate at 2% during the upcoming meeting on October 30, 2023, with no adjustments anticipated in December as inflation stabilizes at the target level [1] Summary by Relevant Sections - **Current Interest Rates** - ECB Vice President, Luis de Guindos, expressed satisfaction with the current interest rate levels, indicating they are appropriate [1] - The deposit rate has remained unchanged at 2% since June 2023, and the market expects this rate to be maintained in the upcoming meeting [1] - **Inflation Outlook** - Inflation has stabilized at the ECB's target of 2%, leading to expectations that there will be no rate adjustments in the December meeting [1] - Guindos highlighted a positive outlook for inflation, stating that the risks surrounding consumer price growth are generally balanced [1]

Core Viewpoint - The European Central Bank (ECB) has decided to maintain its key interest rates unchanged, signaling the end of the easing cycle and potential future rate hikes as inflation stabilizes around the target level [1][3][6]. Interest Rate Decision - The ECB has kept the deposit facility rate at 2.00%, the main refinancing rate at 2.15%, and the marginal lending rate at 2.40% [1][5]. - This marks the second consecutive meeting where the ECB has opted to keep rates unchanged, aligning with market expectations [3][9]. Inflation Outlook - Current inflation levels are near the ECB's medium-term target of 2%, with forecasts indicating an overall inflation rate of 2.1% in 2025, 1.7% in 2026, and 1.9% in 2027 [6]. - The core inflation rate, excluding energy and food prices, is projected to be 2.4% in 2025, 1.9% in 2026, and 1.8% in 2027 [6]. Economic Growth Projections - The ECB has revised its GDP growth forecast for 2025 to 1.2%, up from 0.9% previously, while maintaining a 1.0% growth forecast for 2026 and 1.3% for 2027 [6]. - Economic resilience is attributed to strong demand, with improvements in recent economic data and reduced trade uncertainties [6][10]. Market Reactions and Future Expectations - The EUR/USD exchange rate has been rising, currently reported at 1.17364, reflecting market confidence in the ECB's decisions [11]. - Analysts suggest that the ECB's easing cycle may be over, with future actions likely leaning towards rate hikes rather than cuts, contingent on economic conditions [10].

Core Viewpoint - The inflation rate in the Eurozone has slightly increased to just above the European Central Bank's (ECB) target of 2%, indicating a generally stable inflation environment despite future risks [1] Group 1: Inflation and Economic Outlook - The current inflation data supports the notion of overall stability in the inflation environment [1] - Economic growth remains weak, and future economic conditions are uncertain, which may influence ECB policy decisions [1] - There is a general market expectation that the Federal Reserve may lower interest rates again, which could impact ECB's approach [1] Group 2: ECB Policy Decisions - The decision to pause interest rate cuts is considered logical given that rates are at neutral levels [1] - Some ECB policymakers may still advocate for another rate cut, although this likelihood is deemed low due to sufficient reasons to maintain current rates [1]

Core Viewpoint - The European Central Bank (ECB) is celebrating the stability of inflation in the Eurozone, with a current inflation rate of 2%, but significant disparities exist among member countries, complicating economic management [1][3]. Group 1: Inflation Rates Across Eurozone - In July, only Finland's inflation rate met the ECB's target of 2%, while other major economies like Germany, France, and Italy reported rates below this target [1]. - The gap in inflation rates among Eurozone countries has widened to 5.5 percentage points, up from a low earlier in the year, indicating increasing divergence in economic conditions [3]. - The ECB has maintained interest rates after eight consecutive cuts, with President Lagarde expressing confidence in the stability of inflation at the target level [3]. Group 2: National Central Bank Perspectives - The Greek central bank governor indicated a balance has been achieved between inflation, banking development, and economic growth, suggesting a reluctance to lower rates further, with Greece's inflation at 3.7% [4]. - The Spanish central bank governor emphasized patience in decision-making, with Spain's inflation at 2.7% [4]. - The French central bank governor highlighted the importance of keeping future decisions open, as France's inflation rate has been below 2% for nearly a year, currently at 0.9% [4]. Group 3: Future Inflation Predictions - Predictions indicate that the average inflation rate in the Eurozone is expected to reach 2% by 2027, but only three countries are projected to meet this target [6]. - Service inflation has consistently outpaced overall inflation for two years, driven by recent wage growth, with the current gap exceeding the historical average [9]. - Factors such as a strong euro, influx of cheap goods from countries facing high U.S. tariffs, and weakened export demand may lead to lower-than-expected price growth in the future [12].

Core Viewpoint - The European Central Bank (ECB) is making decisions on interest rates in a gradual manner, which is deemed appropriate, indicating that the baseline is close to the final interest rate level [1] Group 1 - The ECB's approach of making decisions in successive meetings is considered correct [1] - The current baseline for interest rates is close to the final rate [1]