Late on Thursday Goldman Sachs noted that they are pulling forward their forecast for the first ECB policy rate cut from Q324 to Q224.

• This comes as they lower their inflation forecast profile and flag German fiscal headwinds alongside a modest markdown in their Eurozone GDP growth forecast profile.
• They also warn that “the labour market is now showing clear signs of slowing.”
• They look for “a gradual cutting cycle with 25bp moves per quarter.”
• Continued firm nominal wage growth is cited as a contributory factor to this view.
• They note that “while we see a significant hurdle for rate cuts before Q2, the risks around our baseline are clearly skewed towards a faster cutting cycle if inflation continues to slow more quickly than expected or if growth fails to improve next year.”
• They also maintain their baseline that “the Council will announce in January to limit PEPP reinvestments to EUR10bn per month from April, before stopping all reinvestments from Q324. But a formal decision is possible already in December.”