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Posted June 4, 2025 at 9:42 am
In light of yesterday’s inflation figure of 1.9%, which is below the European Central Bank’s 2% objective, tomorrow’s interest rate decision is likely to be a cut. The current deposit rate of 2.25% is expected to be reduced to 2% as the institution increases its focus on employment and growth now that it has achieved significant price pressure accomplishments.
Regarding IBKR ForecastTrader Contracts, I like the “No” answer to the question, “Will the EU Deposit Facilities Rate be set above 2.15% at the meeting of the Governing Council of the European Central Bank ending June 5, 2025.” The “No” costs $0.90. In conclusion, of the 81 forecasters in a Reuters poll, all expect a quarter-point reduction.
Source for Images: ForecastEx, Reuters/Refinitiv.
Note: ForecastEx prices are highest bids as of the morning of June 4, 2025. Reuters/Refinitiv image includes a red circle inserted by J. Torres to highlight the 81 forecasters that all expect a quarter-point reduction to a 2% deposit rate.
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This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Interactive Brokers LLC is a CFTC-registered Futures Commission Merchant and a clearing member and affiliate of ForecastEx LLC (“ForecastEx”). ForecastEx is a CFTC-registered Designated Contract Market and Derivatives Clearing Organization. Interactive Brokers LLC provides access to ForecastEx forecast contracts for eligible customers. Interactive Brokers LLC does not make recommendations with respect to any products available on its platform, including those offered by ForecastEx.
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