Borrowers in the eurozone and in Canada are expected to get some relief from high interest rates this week and the Bank of Canada are forecast to lower their benchmark rates in the coming days.
This would put the ECB and BoC among the first of the big central banks to ease policy in the current cycle, following the Swiss National Bank, which cut its rates in March. “However, what will be more interesting is the trajectory beyond June. We doubt the ECB will provide a lot of guidance here, and expect it to re-emphasise its meeting by meeting approach based on the data flow over the coming months. We think it unlikely that the ECB will commit to any particular rate path.”, for the first month this year, to 2.6%. That took it further away from the ECB’s forecast of 2%, but was still much lower than the year before when euro-area inflation was 6.1%.