Europe’s central banks push back against rate cut bets

In contrast to the Fed, the ECB pushed back this week against expectations that it would start to cut interest rates in early 2024. But we still think that a weak economy and continued declines in price pressures will prompt the ECB to start cutting interest rates by around April next year. The SNB is likely to start loosening at a similar time, with Norges Bank following shortly afterwards. Next week, we will get more detail on what caused the bigger-than-expected fall in euro-zone core inflation in November, and we expect to learn that the German Ifo business climate indicator edged down in December.