The ECB’s Schnabel published a series of slides on the ECB website. She highlights sticky services inflation.

• Services inflation remains sticky, keeping headline inflation elevated
• Price pressures in services sector are broad-based and global
• Medium-term inflation projections often clustered around 2% target, but risks remain
• Wage growth expected to slow, but real wage catch-up still incomplete in parts of eurozone
• Labor market remains tight with high demand and persistent shortages
• Pass-through of higher wages to producer prices stronger in services sector
• Services demand has been resilient but showing signs of weakening
• Monetary policy transmission may be losing some effectiveness
• Geopolitical uncertainty and rise in trade restrictions pose risks to outlook

This doesn’t sound like someone who is in a rush to cut. The market sees about a 33% chance of a cut on October 17 but 37 bps are priced in for December.

This article was written by Adam Button at www.forexlive.com.