staff macroeconomic projections for growth and inflation, which were last delivered in September. Secondly, whether the ECB will modify its consistent messaging that it will “keep policy rates sufficiently restrictive for as long as necessary.” Any dovish shift in that language will be seen to support a swifter pace of rate cuts next year, especially given the potential for looming trade tensions with the U.S. The euro zone’s weak growth outlook and global uncertainty have already led many analysts to update their forecasts to suggest 25-basis-point cuts at every ECB meeting until September 2025, taking the deposit facility to 1.5%. 25 Min Ago Euro zone bond yields higher Germany’s 10-year bond yield , seen as the euro zone benchmark, was two basis points higher at 2.153% at 12:15 p.m. in London, an hour ahead of the European Central Bank’s decision. The French 10-year was near-flat, while Italy’s 10-year yield was four basis points higher. Spreads between euro zone bond yields have been in focus in recent months amid political instability in France and Germany. As of early Thursday afternoon, money markets had fully priced-in a 25 basis point rate cut, and suggested expectations for the ECB’s deposit facility to fall from the current 3.25% to 1.85% in June and 1.75% by September 2025. French and German 10-year bond yields + Chart Line chart with 2 lines. The chart has 1 X axis displaying Time. Range: 2024-12-05 07:56:30 to 2024-12-12 07:56:30. The chart has 1 Y axis displaying values. Range: 2 to 3. If the [ECB’s] communication turns more dovish, then markets may going forward be even keener to price in a lower landing zone on the back of weaker economic data,” ING strategists Benjamin Schroeder and Padhraic Garvey said in a Thursday note. “With a terminal rate pricing of 1.75% the market is already geared towards the central bank taking interest rates into accommodative territory next year,” they said, referring to the interest rate level at which the ECB views monetary policy at the correct level and ends its round of cuts. “But a dovish stance this meeting would probably allow the market to further undershoot this level if the outlook were to worsen, sensing that the ECB could be even more inclined to supporting growth,” they continued. — Jenni Reid