European Inflation Trends Set to Influence ECB Rate Decisions

On Tuesday, European inflation figures are expected, potentially leading to an ECB interest rate cut. German September inflation hit a record low since 2021, while inflation is decreasing in France, Italy, and Spain. The financial markets are bracing for a potential rate cut in October, following President Christine Lagarde's announcement.

European inflation figures due on Tuesday could push the European Central Bank (ECB) toward cutting interest rates later this month. The financial community is on edge.

Inflation in Germany for September was below forecasts at 1.8% year-on-year, the lowest since 2021. Similar trends in France, Italy, and Spain have moved market expectations toward an October rate cut.

President Christine Lagarde indicated on Monday that the ECB would consider these trends in its upcoming policy meeting on Oct. 17. Traders are also expecting another rate cut in December unless global inflation picks up. U.S. market dynamics show a stabilized euro but fluctuating yen and yuan.

(With inputs from agencies.)