ECB’s Lagarde: Some survey indicators suggests the recovery is facing headwinds

• Latest developments strengthen our confidence that inflation will return to target in a timely manner, we will take that into account at meeting in October
• Employment growth slowed to just 0.2% in the second quarter and recent indicators point to a further deceleration in the coming quarters
• The labor market remains resilient
• We expect the recovery to strengthen over time

The market is already ahead of the ECB and has priced in a near-certainty of an October cut. From there, the market prices in a steady series of 25 bps cuts with risks towards a 50 bps cut on the way to 1.75% around this time next year.

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