- An April ECB pause is possible if data indicates something else.
- It is important that we do not pre-commit to any rate path.
- Growth outlook is still subdued, risks are to the downside.
Rehn doesn’t have much conviction evidently as he said just a couple of hours ago that if the data were to verify the baseline, the right reaction should be to cut in April.
There’s no key data ahead of the April meeting and the Eurozone CPI today showed that disinflation is on track with services inflation now coming down more substantially.
The market has more conviction on a cut as the probability stands around 82%.
This article was written by Giuseppe Dellamotta at www.forexlive.com.