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ECB’s dovish shift, euro heading for parity?

ECB policymakers were out in force at the IMF meetings in Washington this week and many seemed willing to contemplate a 50bp rate cut in December. We now think that is the most likely decision and expect the “terminal” rate will be below the 2.5% level that we had previously pencilled in. Next week we expect to learn that headline inflation in the euro-zone rose in October, but that the core rate fell. 

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