Markets See 65% Chance of ECB Rate Cut in December, Bets Rise for 2026

Money markets now price in a 65% chance of a 25-basis-point European Central Bank (ECB) rate cut in December 2025, with odds climbing to 84% by March 2026.Key TakeawaysMoney markets assign a 65% probability to an ECB rate cut in December 2025.Expectations rise to 84% by March 2026, signaling growing conviction on easing.The first cut would likely be 25 basis points, reflecting inflation moderation across the eurozone.Markets Shift to Rate-Cut ExpectationsAccording to data from Jinshi, money market traders now see the European Central Bank (ECB) beginning an easing cycle by the end of 2025.Current pricing implies a 65% chance that the ECB will deliver a 25 basis point cut in December, bringing rates down for the first time in the current cycle.2026 Outlook: More Cuts Ahead?The likelihood of additional cuts grows into next year, with March 2026 odds rising to 84% for another 25 basis point reduction.The move reflects expectations that eurozone inflation will continue to moderate, allowing policymakers to shift from their long‑running tightening stance.Implications for InvestorsEuro Outlook: A rate cut could pressure the euro against the U.S. dollar.Bonds: Lower rates typically support sovereign bond prices.Equities: European stocks could benefit if easing boosts growth expectations.