Markets bet on ECB rate cut

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The European Central Bank will pare back interest rates at a meeting Thursday to give a push to progress made by EU leaders in fighting the crisis at their summit last week, analysts predicted.  The ECB, convening for its regular monthly policy meeting, will trim eurozone borrowing costs by a quarter of a percentage point to a new record low of 0.75 percent, central bank watchers predicted. Doing so will help shore up the relatively positive sentiment on financial markets since the summit, they argued. “The ECB has the chance to calm financial markets at least for a few months if it complements the summit decisions with a serious effort to stimulate the economy,” said Berenberg Bank economist Christian Schulz. “We expect the ECB to cut its main interest rate by 25 basis points to 0.75 percent,” Schulz said.
The central bank has held interest rates in the 17 countries that share the debt-wracked euro at an all-time low of 1.0 percent since December after reversing last year’s rate hikes.... Continue to read.

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