European Markets React to ECB Rate Cuts Amid Trade Policy Shifts

The European Central Bank (ECB) plans an interest rate cut on April 17 due to inflation threats and slower growth, following a U.S. tariff delay. Market volatility persists due to fluctuating trade policies. Business sentiment in Europe continues to sour despite earlier hopes of economic revitalization.

The European Central Bank is set to trim interest rates on April 17 to counter falling inflation and decelerating growth, a move prompted by a U.S. decision to delay wide-reaching tariffs. This step was predicted by a Reuters poll of economists prior to the unexpected U.S. announcement.

President Trump's recent 90-day moratorium on tariffs, excluding China which faces a 125% barrier, has momentarily stabilized global financial markets. However, a 10% blanket duty on most U.S. imports remains, alongside existing auto, steel, and aluminum tariffs, posing risks to eurozone growth and inflation.

Amid easing pressures, the ECB is expected to proceed with another rate cut, anticipated by the majority of economists. Market experts, like those at Morgan Stanley, are forecasting a 25 basis point cut in April, while emphasizing the external volatility's impact on eurozone inflation projections.

(With inputs from agencies.)