ECB October 2024 Preview: an itchy trigger finger

Summary:

• On Thursday, a 25bps rate cut is a near certainty. It would be a rate cut that the ECB itself certainly did not see coming at the September Governing Council meeting;
• The ECB lost its nerve after the weak September PMI, which stoked fears that the economy is teetering on the brink of a recession. Surprisingly, hawks on the Council were first to push for a cut this month;
• Expect dovish guidance in the sense that the ECB will finally admit that is has, in fact, embarked on an easing cycle. While the ECB will likely not give explicit guidance for another cut in December, a move that month is all but assured.