ECB on a declining rate path but a further cut in October unlikely

ECB cut by 25 bps today: At today’s meeting the GC unsurprisingly decided to cut its key rate, the deposit rate, to 3.50%. As previously already announced, the change in the operational framework will become effective from Sep. 18 onwards so that spread to the repo rate will be permanently reduced to 15 bps (from 50 bps before) bringing the repo rate down to 3.65% by then.