Traders are widely anticipating an interest rate cut at the Federal Reserve’s Sept. 17-18 meeting, as well as at the ECB’s meeting this week.

Our central scenario still has the ECB holding its deposit rate at 3.5 per cent in October and cutting to 3.25 per cent in December, but we have recalibrated the probability of back-to-back cuts in light of recent policymaker comments suggesting that the chance of additional easing is higher.

With inflation subsiding, the European Central Bank is expected to cut interest rates again on Thursday to prop up tepid growth with lower borrowing costs for companies and home buyers. The U.S. Federal Reserve likely won't be far behind in joining the rate-cutting process.

Switzerland’s central bank cut its key interest rate for the third straight meeting as it pivots away from worries about high inflation toward concerns about the impact of a strong currency on exporters.