THE ECB IS EXPECTED TO START THE RATE CUTS IN JUNE – NORDEA

Euro Area inflation continued to slow down in February. Economists at Nordea continue to expect the first rate cut in June

Euro area inflation falls

Euro Area headline inflation slowed down to 2.6% (2.8% in January) and core inflation to 3.1% (3.3%) in February.

Given the new inflation numbers and our view on a gradually cooler labour market we continue to expect the ECB to start cutting rates in June. The chances that rates would be cut earlier are rather small after today’s inflation numbers but on the other hand, the ECB has to be rather hawkish not to see the fading inflationary trends and weak macro picture and to delay the cuts even further.