The upcoming ECB meeting on December 12 is expected to be a crucial moment for monetary policy in the Eurozone. President Lagarde is anticipated to indicate a shift away from the current restrictive monetary policy, emphasizing the importance of economic stability and avoiding recession.
Analysts predict a modest 25 basis point interest rate cut, in line with the ECB's cautious approach. Market expectations reflect this conservative stance, as euro money markets do not anticipate any surprises from the Governing Council. The euro is trading just above parity with the dollar, adding to the urgency for a clear and decisive message from the ECB to boost confidence in the region's economic outlook.