UBS has adjusted its expectations regarding the timing of interest rate cuts by the European Central Bank, now anticipating that the first cut will occur in September instead of July as previously expected. This change comes in light of ongoing trade tensions between the United States and the European Union, which have been one of the influencing factors in the bank's previous decision.
The Swiss bank confirmed in its new report that it does not expect the European Central Bank to lower interest rates during the upcoming monetary policy meeting next week. This adjustment reflects alignment with market expectations, as data indicates that approximately 97% of traders do not anticipate any change in interest rates during the next meeting.
The latest pricing in financial markets indicates that the expected cut in interest rates by the European Central Bank until the end of this year does not exceed 20 basis points, reflecting a shift in the general sentiment among investors towards the possibility of delaying monetary easing steps.
This shift from UBS comes at a time when the European Central Bank is closely monitoring economic developments in the eurozone, especially with continued inflationary pressures and signs of slowing growth, complicating the task of determining the optimal timing to start a rate-cutting cycle without harming price stability or undermining market confidence.
