Deutsche Bank says now expects a faster ECB rate-cutting cycle

LONDON (Reuters) – Deutsche Bank said on Thursday it now anticipated a faster European Central Bank rate-cutting cycle, with back-to-back quarter-point rate cuts starting from December.

The bank said that it had previously expected the central bank to follow a gradual easing path with quarter point cuts every quarter until a terminal rate of 2-2.5% was reached around end-2025.

“We are moving to a faster normalization call, with the ECB to reach the same terminal rate of 2.00-2.50% six months earlier in mid-2025,” the bank said in a note.

“We expect this more rapid easing cycle to be achieved with back-to-back 25 bp cuts from December, but we do not rule out a 50bp cut in December.”

Deutsche is the latest bank to change its ECB policy call this week following further signs of a weakening economic outlook.