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JP Morgan changes ECB call after eurozone business growth data
[LONDON] JP Morgan said on Tuesday that it no longer expects the European Central Bank to cut interest rates, or announce an extension of its bond-buying programme in September, after better-than-expected eurozone business growth data.
The bank had previously been calling for a rate cut of 10 basis points. It said while it still expected the ECB to extend quantitative easing by nine months to December 2017, it no longer expected this to be announced at the ECB's Sep 8 meeting.
"The positive news from today's PMI has implications for our growth and ECB forecasts," JP Morgan said in a note, saying it was not making a change to its growth forecasts on Tuesday but only flagging that it could be higher than previously expected.
Markit's flash composite Purchasing Managers' Index edged up to a seven-month high in August, data on Tuesday showed, beating expectations in a Reuters poll of economists.