Euronews is no longer accessible on Internet Explorer. This browser is not updated by Microsoft and does not support the last technical evolutions. We encourage you to use another browser, such as Edge, Safari, Google Chrome or Mozilla Firefox.



Key euro zone market inflation gauge nears all-time lows ahead of ECB

Key euro zone market inflation gauge nears all-time lows ahead of ECB
FILE PHOTO: An European Union flag flutters above the Germany's Christian Democratic Union party (CDU) headquarters after first poll results of the European Parliament elections in Berlin, Germany, May 26, 2019. REUTERS/Hannibal Hanschke -
Text size Aa Aa

LONDON (Reuters) – A key market gauge of euro zone inflation expectations, the five-year, five-year forward inflation swap, on Thursday fell to within sight of record lows hit in 2016 ahead of a European Central Bank meeting.

The five-year, five-year forward fell to 1.2739%, its lowest point since 2016 when it fell to a record low around 1.25%.

The sharp decline in inflation expectations in recent weeks is a worrying sign for the ECB, which has failed to meet its near 2% inflation target in recent years.

Money market pricing showed that investors now price in almost a 70% chance of a 10 basis point cut in ECB rates by the end of the year.

(Reporting by Virginia Furness; Editing by Dhara Ranasinghe)

euronews provides breaking news articles from reuters as a service to its readers, but does not edit the articles it publishes. Articles appear on for a limited time.