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The euro continues to show limited movement and is almost unchanged on Thursday. EUR/USD is trading at 1.1010 in the North American session at the time of writing.

ECB expected to deliver 25 bps cut

The European Central Bank meets later today and the markets are expecting a rate cut of 25 basis points, which bring down the key rate to 3.5%. This would mark the second rate cut after an initial 25-bps reduction in June. A jumbo 50-bps cut is also a possibility but I expect the ECB to play it safe and deliver a modest cut of 25-bps.

Inflation has fallen to 2.2% its lowest level since July 2021 and is close to the ECB’s target of 2%, although core CPI is higher at 2.8%. Wage growth has eased and eurozone GDP for Q2 was revised downwards to 0.2%, which means that conditions are favorable for another rate cut at today’s meeting.

If inflation remains low, the ECB could try to squeeze one final rate cut before year’s end and continue trimming in early 2025. ECB President Lagarde has ditched forward guidance, saying that rate decisions will be data-dependent. Still, the ECB has widely telegraphed that it will lower rates today and it’s no secret that the central bank is looking to continue cutting if the data is favorable.

The ECB will also release updated economic forecasts today and investors will be looking for hints about future rate policy. If Lagarde sends a dovish message about future rate cuts, it would likely hurt the euro, which has gained 1.1% against the US dollar since late August.

EUR/USD Technical

• EUR/USD is testing resistance at 1.1023. Above, there is resistance at 1.1044
• There is support at 1.0991 and 1.0970

NZD/USD is attempting to recover from yesterday’s decline on Thursday and is heading towards 0.6148. The pair came under downward pressure on 29 August, and since then its attempts to stabilise have not brought any tangible result. The ambiguous US inflation release has increased bets that the Federal Reserve will ease monetary policy very cautiously next week. This means a 25-basis-point interest rate cut.

The Reserve Bank of New Zealand has already started its easing cycle, with a launch in August. At that time, the RBNZ cut interest rates by 25 basis points, marking the first reduction in four years. The RBNZ is expected to lower borrowing costs at each of the two meetings scheduled for this year, with a 50-basis-point rate cut possible at one of these meetings.

The consensus forecast suggests that the cash rate will be 3.00% by the end of 2025, down from 5.25% now. As for the latest statistics, annual food inflation in New Zealand eased to 0.4% in August from the previous 0.6%. This is a good signal, enabling the RBNZ to maintain its global easing stance.

Technical analysis of NZD/USD

The NZD/USD H4 chart shows that the market has completed a downward wave, reaching 0.6106. A corrective structure is forming today, aiming for 0.6150 (testing from below). The correction could extend to 0.6166. Subsequently, the price might decline to 0.6070, potentially continuing the trend towards the local target of 0.6050. This scenario is technically supported by the MACD indicator, whose signal line is below zero and pointing strictly downwards.

The NZD/USD H1 chart shows that the market has formed a consolidation range around 0.6140 and extended it down to 0.6106. Today, the market is correcting the downward wave, with the target for a correction of at least 0.6157. Once the correction is complete, the downward wave could develop towards 0.6069. This scenario is also technically supported by the Stochastic oscillator, whose signal line is below 50 and pointing strictly towards 80. Subsequently, a decline to 20 is expected.

• AUDUSD battles with 50-day SMA
• Stochastics point north but RSI flattens

AUDUSD had a bullish start on Thursday, with the price flirting with the 50-day simple moving average (SMA) at 0.6670.

Momentum signals are neutral-to-bullish, with the RSI appearing to be heading south, while the stochastic oscillator has reversed higher after the bullish crossover within its %K and %D lines in the oversold area.

Should the price continue to decline, the 0.6620 support could be a significant barrier to keep in mind because it overlaps with the 200-day SMA. Below that, the focus could shift straight to 0.6560, which is close to the short-term uptrend line.

On the other hand, a recovery could retest the 20-day SMA at 0.6730 before turning attention to the 0.6765 resistance. Moving higher, the 0.6820 bar should be another tough obstacle for traders as the price paused its uptrend at the end of August.

Looking at the short-term picture, the bullish outlook reemerged following the unsuccessful attempt to break below the 200-day SMA. For a bull market, traders need to wait for a clear close above 0.6820.

Overall, AUDUSD is currently holding a positive profile both in the medium- and long-term timeframes.

EURUSD stays in a quiet mode early Thursday as traders reduced speed ahead of key event of the day – ECB policy decision.

The central bank is widely expected to cut rates by 25 basis points to 3.5%, after June’s 0.25% rate cut.

With today’s cut being almost certain, markets turn focus towards ECB’s next steps, looking for the dynamics of ECB’s action in the near future.

While some expect the central bank to deliver another 25 basis points cut in October, arguing that inflation continues to ease and is near 2% target and economic growth is anemic, with no significant changes in economic picture expected, others point to persisting inflation risk which requires cautious approach.

This fits within ECB’s mantra that any future decision will be based on incoming data and taken meeting by meeting.

Near-term price action is in a sideways mode for the second day and holding just above pivotal 1.10 support zone (psychological / Fibo 38.2% of 1.0666/1.1201).

Technical picture is weakening as the price broke below MA’s (10/20-d) and bearish momentum is strengthening, with long upper shadow on Wednesday’s candlestick pointing to strong supply.

Dovish comments from ECB policymakers would raise pressure on euro, with firm break of 1.10 to open way for deeper pullback towards 1.0947/33 (55DMA / 50% retracement), guarding the top of rising daily cloud (1.0893).

Conversely, the single currency may receive fresh boost from more hawkish ECB’s stance, with lift above daily Tenkan-sen (1.1078) to sideline immediate downside risk.

Res: 1.1051; 1.1078; 1.1091; 1.1119.
Sup: 1.1000; 1.0947; 1.0933; 1.0893.

Market picture

US financial markets closed higher on Wednesday despite a rough start to the day. A strong performance from the technology sector helped the crypto market cross the $2 trillion mark, up 3% in 24 hours. The positive sentiment in the market continued into Thursday morning, setting the market up for further gains, potentially through to Wednesday evening next week, when the Federal Reserve announces its interest rate decision.

Bitcoin gained 2.5% in 24 hours, underperforming the broader market, but the price briefly broke above $58K on Thursday morning, something it had failed to do in previous days. A rebound from the lower boundary of the descending corridor could see Bitcoin top out at around $65.5K by the end of the month, with interim stops at $60K and $64K, the 50 and 200-day moving averages, respectively.

Ethereum is trading near $2350 but remains heavy, struggling to add 1% for the day and has yet to break above highs on Wednesday, which closed with a decline. The second most widely traded cryptocurrency has found support below $2150 but has yet to see a confident rebound.

News background

Another recalculation saw the first cryptocurrency’s mining difficulty rise by 3.58% to an all-time high of 92.67 T. The average hash rate for the period since the previous change was 662.34 EH/s, indicating bitcoin miners’ confidence in the prospects of digital gold. At the same time, fresh price corrections could intensify selling due to a global decline in risk appetite, Glassnode noted.

Bitwise expects the crypto market to shift to growth in October-November after the end of US macroeconomic and political uncertainty. September is historically the worst month for Bitcoin.

Bitcoin will continue to grow regardless of the outcome of the US presidential election in November, Matrixport believes, citing BTC’s growth under both the Trump and Biden administrations. The next US president will have a greater impact on the country’s regulation of the crypto market.

BTC is moving from weak hands to strong hands, CryptoQuant noted. The number of bitcoins held by short-term holders is declining, while long-term holders are accumulating the asset.

The PayPal and Venmo teams have integrated the Ethereum Name Service (ENS). PayPal and Venmo app users can enter the recipient’s ENS domain directly into the search field when sending digital assets to automatically identify wallets connected to the service.

• WTI crude oil rises from 17-month low
• Momentum oscillators gain some ground

WTI crude oil has finally climbed higher from the 17-month low of 65.70 after the aggressive selling interest from the 78.75 resistance. Over the last three weeks, the commodity has lost more than 16%, switching the outlook to strongly bearish.

According to technical oscillators, the MACD is losing its negative momentum and is ticking slightly up, while the stochastic oscillator is heading north after the bullish crossover within its %K and %D lines in the oversold area. Both are indicating that the sharp selling interest may come to an end.

If the market continues the upside rally, then the price may find resistance at the 70.00 psychological level ahead of the 71.30 and 72.70 levels. A jump above the uptrend line and the 20-day simple moving average (SMA) could find immediate obstacle at the short-term descending trend line at 76.60, which overlaps with the 50-day SMA.

In the negative scenario, a downturn beneath the multi-month low could boost the sell-off until the next support which is taken from the bottom in April 2023 at 63.60.

In brief, oil prices have been in a significant downward move since July 3 and only a jump above the 84.70 resistance level may switch the outlook to bullish.

Short Term Elliott Wave view on DAX suggests that the Index is correcting cycle from 8.5.2024 low in 3, 7, or 11 swing before it resumes higher. The pullback on 8.5.2024 towards 17024.6 ended wave ((4)). The Index has turned higher in wave ((5)) with internal subdivision as an impulse Elliott Wave structure. Up from wave ((4)), wave ((i)) ended at 17505.23 and wave ((ii)) pullback ended at 17233.07. Wave ((iii)) higher ended at 17666.82 and pullback in wave ((iv)) ended at 17439.87. Wave ((v)) higher ended at 18920.1 which completed wave 1 in higher degree. Dips in wave 2 ended at 17669.64.

Up from wave 2, wave ((i)) ended at 17921.99 and wave ((ii)) ended at 17827.08. Wave ((iii)) higher ended at 18344.22 and wave ((iv)) ended at 18240.17. Wave ((v)) higher ended at 18495.28 which completed wave 3 in higher degree. Pullback in wave 4 ended at 18349.98. Final leg wave 5 ended at 18990.78 which completed wave (1) in higher degree. Wave (2) pullback is in progress to correct cycle from 8.5.2024 low as a double three Elliott Wave structure. Down from wave (1), wave W ended at 18414.13 and wave X ended at 18607.79. Expect wave Y to extend lower to correct cycle from 8.5.2024 low in 7 swing towards 17659.1 – 18018.6 area before it turns higher. As far as pivot at 17024.62 low stays intact, expect pullback to find support in 3, 7, 11 swing for more upside.

DAX 60 Minutes Elliott Wave Chart

DAX Elliott Wave ChartDAX Elliott Wave Video

https://www.youtube.com/watch?v=YbaZfXCij8w

Markets

US yields finished 0.3 bps (30-yr) to 4.6 bps (2-yr) higher yesterday in a volatile session. The (trade-weighted) dollar approaches first resistance at 101.92/102 (101.68 close). EUR/USD came within striking distance of the 1.10 mark. For most of US trading hours, the key question was whether a small upward surprise in monthly US core CPI (0.3% M/M instead of 0.2%) was sufficient to completely close the door on a 50 bps rate cut by the Fed next week. In the end, money markets reduced bets on such a start, but the door remains open. The upward surprise came especially from shelter costs and was for a large part compensated for by lower energy prices. Core US CPI could nevertheless remain sticky above 3% Y/Y for somewhat longer than earlier anticipated. The US Treasury’s $39bn 10-yr Note auction was strong with the auction yield 1.4 bps below the WI yield. The bid-cover (2.64) was also above the 6-month average (2.53). An AI-driven rally pulled US stock markets up to 2.17% higher for the Nasdaq.

The ECB is expected to cut its deposit rate for a second time this year by 25 bps, to 3.50%. As announced in March, they will also reduce the spread between the main refinancing rate and the deposit rate from the current 50 bps to only 15 bps implying an MRR rate cut of 60 bps, from 4.25% to 3.65%. Updated GDP and CPI forecasts will be closely watched for clues on the monetary policy trajectory going forward. However, we don’t expect big changes apart from perhaps some minor downward revisions to this year’s GDP and headline CPI data. Recall that ECB staff in June plotted a 0.9%-1.4%-1.6% growth path for 2024-2026 and a 2.5%-2.2%-1.9% inflation trajectory. While keeping an easing bias, we don’t expect the central bank to pre-commit to specific actions at coming meetings. The short intermeeting period between September 12 and October 17 suggests that bar any big surprise, the central bank might be more inclined to sit the October meeting out and stick with the currently, quarterly, rate-reduction scheme with a next 25 bps move coming only in December. Unlike the Fed, the ECB’s options for making policy less restrictive are smaller given limited room towards neutral territory in the current, stubborn, (core) inflationary environment. EMU money markets currently attach a 40% probability to a follow-up rate cut in October. Even if Lagarde holds back from giving any guidance for October, we believe that market speculation will remain in a context where most central banks are making their monetary policies less restrictive. This suggests that any market reaction on today’s statement and Q&A session (higher ST EUR rates and stronger EUR) could be modest and in any case temporary in nature.

News & Views

Insiders say the European Commission is examining its options to roll over several hundreds of billions of euros of EUNextGen bonds issued during the Covid-era. At the heart of the issue are the ones issued to finance the grants distributed to the member states. Unlike the loans, which have to be paid back by member states from 2031 on, the EC has no means outside the budget to repay those bonds when they start maturing. The amount of grants currently disbursed is some €170bn but could increase to as much as €357bn. Leaving the matter unaddressed would result in yearly debt repayments and interest costs of around €30bn from 2028 on – an amount that roughly equals a sixth of the EU’s current annual spending. Former ECB president Draghi in his report on European competition earlier this week warned for this looming budget squeeze given the unwillingness (for now) of EU member states to give the Commission revenue-raising powers or additional money. It was Draghi too who floated the idea of rolling over the debt. The topic is a controversial one, especially for the likes of Germany who’s constitutional court only approved the EUNextGen programme on the grounds it was a one off and time-limited. Changing the terms requires unanimous backing of all member states.

The UK Royal Institution of Chartered Surveyors (RICS) said the house price balance edged up to 1% in August, a significant jump from the -18% recorded in July (and vs consensus of -14%). It was the first positive outcome since October 2022 and has come a long way from the a post-GFC low at -64.5% exactly one year ago. All subindices posted improvements compared to July with price expectations (from 9% to 14%), sales expectations (37%) and new buyer enquiries (15%) al rising solidly. Agreed sales (6%) climbed to the highest level since May 2021.

Graphs

GE 10y yield

The ECB cut policy rates by 25 bps in June. Stubborn inflation (core, services) make follow-up moves less evident. Markets nevertheless price in two to three more cuts for 2024 as disappointing US and unconvincing EMU activity data rolled in, dragging the long end of the curve down. The move accelerated during the early August market meltdown.

US 10y yield

The Fed in its July meeting paved the way for a first cut in September. It turned attentive to risks to the both sides of its dual mandate as the economy is moving to a better in to balance. The pivot weakened the technical picture in US yields. A string of weak eco data and a risk-off market climate pushed and kept the 10-yr sub 4%. We think we could be up to three 50 bps rate cuts this year.

EUR/USD

EUR/USD moved above the 1.09 resistance area as the dollar lost interest rate support at stealth pace. US recession risks and bets on fast and large rate cuts trumped traditional safe haven flows into USD. EUR/USD 1.1276 (2023 top) serves as next technical references.

EUR/GBP

The BoE delivered a hawkish cut in August. Policy restrictiveness will be further unwound gradually on a pace determined by a broad range of data. The strategy similar to the ECB’s balances out EUR/GBP in a monetary perspective. Recent better UK activity data and a cautious assessment of BoE’s Bailey at Jackson Hole are pushing EUR/GBP lower in the 0.84/0.086 range.

In focus today

Today, the ECB is widely expected by both analysts and markets to deliver a 25bp rate cut. The moderation in the labour market and economic activity since the June meeting should lead to a further increase in the confidence of the disinflationary process being on track, in particular given the slowdown in wage growth. For more details, please see ECB preview - Dialling back, but pace uncertain, 5 September.

In Norway, the Regional Network survey is released, providing insights into capacity utilisation, which could be decisive for Norges Bank's message on 19 September. Although Norges Bank advised markets in June against speculating on rate cuts this year, recent domestic and global developments have considerably increased the probability of a rate cut in 2024. If capacity utilisation metrics turn over significantly, we stand ready to adjust our current call for the first Norges Bank rate cut to not come until March 2025.

In Sweden, CPI for august is released. We expect CPIF inflation to drop significantly to 1.1% y/y in August, 0.6 pp. below the Riksbank's forecast. Our forecast for CPIF excl. energy at 2.1% y/y aligns closely with the Riksbank's view. If correct, focus is on how the Riksbank will handle such an outcome in its monetary policy.

Economic and market news

What happened overnight

In Japan, wholesale inflation for August was lower than expected at -0.2% m/m and 2.5% y/y, compared to consensus of 0.0% m/m and 2.8% y/y. The surprise was due to the yen's rebound, which eased import cost pressures. The slowdown, expected to impact consumer prices in the months ahead, could influence the timing of the Bank of Japan's (BoJ) next rate hike. Moreover, this morning, the hawkish BoJ member Tamura stated that rates must rise to at least 1% by late next year, as the likelihood of achieving the 2% inflation target sustainably has improved. Tamura's comment, the first to specify a target rate, follows other BoJ members advocating for continued hikes despite market turmoil.

What happened yesterday

In the US, headline inflation in August was close to expectations at 0.2% m/m SA and 2.5% y/y (cons: 0.2% m/m SA, 2.6% y/y). Core inflation was slightly higher than expected at 0.3% m/m SA (cons: 0.2%), while the yearly figure matched expectations. The modest upside surprise was mostly driven by shelter prices, while price pressures elsewhere in the services sector, in core goods as well as in food and energy were close to expectations. Shelter, and more precisely the contribution from owners' equivalent rent (OER) rose to the highest level since January. However, it should be noted that shelter CPI lags changes in the actual rental/real estate market by 10-11 months, implying that this should not be seen as a sign of re-accelerating inflation pressures. Hence, the print does not derail the Fed from cutting rates next week but supports our case of a 25bp cut. After the release, markets priced the odds of 25/50bp cuts at 85%/15% in favour of a smaller move.

Kamala Harris emerged as the stronger candidate in the presidential debate against Donald Trump. Harris conveyed a more forward-looking vision, while Trump mainly focused on criticizing the current administration and lacked clarity on his own initiatives. Republican strategists noted that while Trump's performance was not seen as a major setback, his re-election bid appeared more uncertain. A YouGov flash poll showed 43% of viewers saw Harris as the winner, compared to 28% for Trump, with 30% undecided.

Harris now also seems to be the clear favourite according to prediction markets. However, the race remains close, particularly in the swing states. For details on the US election, see our US Election Monitor, 6 September, which we plan to update bi-weekly until election day.

The markets reacted to the debate by sending the USD and yields slightly lower, suggesting that expectations of Trump pursuing more expansionary fiscal policies and protectionist measures remain intact. Yesterday's price action likely provides a good gauge for how markets may react to election news going forward, though the longer-term implications are less clear-cut.

In the UK, the monthly GDP figure for July was weaker than expected at 0.0% m/m (cons: 0.2%, prior: 0.0%), signalling an economy starting to lose steam, while the 3M/3M measure printed at 0.5% (cons: 0.6%, prior: 0.6%). The downside surprise was broad-based, driven by declines in industrial and manufacturing production as well as construction, while services continued to contribute positively. That said, it should be noted that this data is of volatile nature, and hence that the topside risk to demand is still in place - in line with the Bank of England's expectation.

Equities: Global equities rose yesterday, led by US large-cap, cyclical growth stocks. This movement was prompted by a slightly higher-than-expected CPI, which sent the short end of the yield curve higher in the US, thereby reducing the likelihood of a 50-basis point cut next week. Hence, equity investors see it as a relief that the Fed may not need to implement a double cut, implicitly indicating that the economic outlook remains solid. Additionally, there was a significant cyclical rotation, with energy being the worst performer and tech performing exceptionally well. If yesterday's boost to equities had been driven by strong growth or demand numbers, we would have likely seen more broad-based gains, and energy would not have underperformed so significantly. It is also important to note the negative correlation between bonds and equities on a CPI day. This indicates significant progress in the inflation normalization process and a shift in investor views on inflation. In the US yesterday, the Dow closed up by 0.3%, the S&P 500 by 1.1%, the Nasdaq by 2.2%, and the Russell 2000 by 0.3%. Asian markets soared this morning, with some of the most cyclical and tech-heavy markets up more than 3%. US futures are also trending higher, with European futures up by more than 1%.

FI: Today's main event is the ECB meeting. A 25bp cut seems to be a done deal, and markets will therefore focus on guidance and the updated staff projections at the meeting. On Friday, the broad wage measure - compensation per employee - showed a noticeable decline in the annual wage growth in Q2 from 4.8% y/y to 4.3% y/y, and this has likely dampened some of the concern related to the still elevated domestic inflation measures in August. We expect Lagarde to confirm that ECB is entering the dialling back phase, but we do not expect a commitment to a specific timing of further cuts; thus, we do not anticipate that it will deviate from the meeting-by-meeting and data-dependent approach to the policy rate changes, thereby keeping its guidance's optionality and flexibility. Markets are pricing 62bp this year and 126bp in 2025. See ECB preview - Dialling back, but pace uncertain, 5 September.

FX: While the USD gained modestly in yesterday's session the most notable G10 move was the sell-off in NOK which stopped just around the 12.00 figure in EUR/NOK before the Norwegian currency found some well-needed support from Brent crude moving back above USD 70/bbl. EUR/SEK remains in the low 11.40s while USD/JPY failed to extend a move below 142. Finally, EUR/CHF rebounded just short of the 0.93-level before finding a newly weekly high around 0.94.

The latest US CPI data, and the reaction to data was mixed on Wednesday. The good news is that the headline inflation fell from 2.9% to 2.5% in August, and sank significantly below the 3% level where it was resisting since last summer. The drop in food and energy prices helped easing pressure in the headline figure. But core inflation – which excludes volatile food and energy prices – came in line with the expectations on a yearly basis, and slightly higher-than-expected on a monthly basis. Cost of housing and travel were responsible for the stickiness in core inflation.

While the retreat in food prices is the continuation of the post-pandemic supply chain improvement story, and easing in energy prices is due to global geopolitical and economic factors, the stickiness in housing remains an issue that the Federal Reserve (Fed) must address with its rate policy. Therefore, yesterday’s data came to wave goodbye to the 50bp cut hopes at next week’s FOMC meeting. The probability of a 50bp cut melted to 13%, pulling the probability of a 100bp cut this year down with it.

The US yields fell and the US dollar rebounded. Equities first slid on moodiness that the Fed would cut less than projected before the CPI data release then rebounded on optimism that if the Fed cuts less it’s because economy is doing relatively fine. The S&P500 gained 1% and closed the session above its 50-DMA. The Dow Jones and the Russell 2000 gained around 0.30%. Technology stocks led gains leading to a more than 2% jump in Nasdaq 100, but the energy sector remained under pressure despite a rebound in oil prices after Hurricane Francine ran over key oil production zones in the Gulf of Mexico - that produces around 15-17% of the US total production - and where oil producers had to shut around 25% of their operations.

But we know that it will take more than a hurricane or a war in the Middle East to push oil prices sustainably higher in the foreseeable future. The demand concerns are growing, OPEC turns cautious, and Citi goes a step further, stating that 'there’s no room for any more barrels' in the market. They argue that not only should the cartel avoid increasing production, but it must also cut an additional one million barrels per day throughout 2025 to balance the market."

Nvidia’s has another problem

High demand... Nvidia’s CEO Jensen Huang said yesterday that the demand for its advanced chips is ‘so great’ that customers are frustrated if they don’t get their chips fast enough. ‘Everyone wants to be first and everyone wants to be most’ he said – first-world problems. His words gave a boost to Nvidia, and the stock rallied more than 8% yesterday, defying the AI fatigue. VanEck’s semiconductor ETF jumped more than 5%.

EUR/USD tests 1.1000 ahead of ECB decision

The US dollar jumped and extended gains in Asia this morning. The USDJPY rebounded after having tested the 140 waters, Cable flirted with the 1.30 support – as British growth stagnated for the second month in a row, and the EURUSD tested the 1.10 level.

The European Central Bank (ECB) will meet and most likely deliver its second 25bp cut later today. A 25bp cut is fully baked in the market prices, but there is room to act on what comes next. The Eurozone economies have been slowing, Germany is having hard time keeping its head above water, the right-wing parties are surging (even in Germany and France), no one sees the end of the tunnel in the Ukrainian war, and even China is not there to help the European luxury brands afloat.

In this gloomy context, some ECB members will be tempted to cut more than the 50bp baked in the market prices for this year, but some members will remain cautious pointing at the risk of inflation uptick. Therefore, Lagarde’s post-meeting presser will show the direction the euro will take from here. If Lagarde sounds like she and her colleagues remain concerned about the inflation risks, the EURUSD could find support near the 1.10 level and make another attempt on the 1.12 in the coming weeks. But if she shows growing concerns about the gloomy economic outlook, it will be the right time and the right reason for the EURUSD to return below the 1.10 mark. The economic and political setup have the potential to tilt expectations toward a series of three 25bp cuts starting from today. The latter would require a dovish adjustment to ECB expectations and the euro’s valuation.