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We have already seen rate cuts from Australia, Canada and the US and more is coming. The big uncertainty is whether the ECB is willing to cut rates further at the ECB meeting on 12 March. Analysts at Danske Bank are uncertain with the next moves of the European Central Bank (ECB). 

Key quotes

“Had the interest level been positive, we believe there would be little doubt that it would cut rates. However, with the depo rate at -0.50%, whether the ECB is willing to go deeper into the negative given the potential negative impact on the European banking sector is uncertain.”

“In our view, the last thing Europe needs is a new debt crisis. However, when we weigh up the pros and cons, we arrive at the conclusions that the ECB will be hesitant to go deeper into negative next week and that the ECB will see the current QE programme as adequate.”

“We should expect targeted new liquidity measures to secure funding for banks. However, we underline that uncertainty is high, things can change quickly from day to day and we rule out nothing ruled out.”