ECB rate cut expectation tomorrow 6th November 2008

This is an interesting take on the rate cut we are expecting tomorrow, it comes from Fixed Income expert Marc Ostwald of Monument Securities. In a survey of 54 economists it was expected that we may see a 50 basis point or half a percent rate cut.

We have felt that this is likely but you cannot rule out a greater than 50 bip drop because the ECB may want to deliver a good jolt of stimulation and the way to do that may be a greater than 50 basis point reduction, our belief was that it could rise as much as 75 basis points however, Marc Ostwald seems to think that even a whole 100 bips or 1% is not off the cards. We’ll just have to wait and see!

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