The European Central Bank (ECB) is expected to cut its deposit rate by 25 basis points in both October and December, according to a Reuters poll of economists. This follows a dip in euro zone inflation to below 2% in September, with ECB President Christine Lagarde signaling that rate cuts are likely. The deposit rate, currently at 3.5%, is expected to drop to 3.25% in October and to 3.00% by December. Economists predict further cuts in 2025 as inflation continues to decline, while the euro zone economy faces ongoing growth challenges.
Oil rally pauses as investors await Israeli response
A rally in oil prices took a break on Tuesday as the market waits for Israel’s response to last week’s Iranian rocket attacks that prompted a price surge on concerns of a broader conflict in the Middle East. Both benchmark contracts rose more than 3% on Monday to their highest since late August, adding to last week’s rally of 8%, the biggest weekly gain in over a year, on concerns that hostilities could disrupt oil supplies from the Middle East.
“While short-term upside pressure will likely be maintained until there is clarity on what Israel will do next, decline in Brent has shown that a rise above $80-82 per barrel will encounter resistance because demand uncertainties and oversupply permutations cannot be shaken off that easily,” Gaurav Sharma, an independent oil analyst in London said.
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