The ECB is widely expected to cut by 25 bps and bring the policy rate down to 2.00%. The central bank is also expected to revise its economic projections downward for growth and inflation.

The market expects the ECB to cut by 25 bps again in September and reach the bottom of their neutral rate range at 1.75%. This could be a non-event given that everything is pretty much priced in and it will be hard to get any surprise.

President Lagarde is likely to strike a more neutral tone and reaffirm data dependence as they approach the end of their easing cycle.

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