Eurozone PMI Steady ECB Rate Cuts Limited

Eurozone PMI Steady, Inflation Concerns May Limit ECB Rate Cuts in 2026

• The Eurozone Manufacturing PMI remains at 52.2, indicating ongoing economic expansion.
• ECB forecasters project an average inflation rate of 2.7% for 2026, highlighting persistent inflation concerns.
• Current market pricing shows a 100% YES for a 50+ bps interest rate decrease at the April 2026 ECB meeting, despite inflation priorities.
• The GDP growth forecast for 2026 has been revised down to 1.0% due to rising energy costs.

The Eurozone’s stable manufacturing PMI and higher inflation forecasts suggest that the European Central Bank may focus on controlling inflation rather than implementing aggressive rate cuts at its April 2026 meeting.