“The direction will be downwards in the future as well, but by no means a straight line,” says Nordea's chief analyst Jan von Gerich.
POPULAR the reference interest rate for mortgages, the twelve-month euribor, fell rapidly downwards on Thursday.
The one-year Euribor rate was quoted on Thursday at 3.505 percent, or 0.067 percentage points lower than on Friday. The last time the interest rate was as low was in March 2023.
The twelve-month euribor has been at its highest this year at 3.676 percent, where it was quoted on Wednesday of last week.
“The rise in the 12-month Euribor at the beginning of the year has now been wiped out, as today saw the biggest decline day of 2024 so far,” says Nordea's chief analyst Jan von Gerich messaging service in X.
“In the big picture, the direction is downward in the future as well, but by no means a straight line, and there will still be plenty of up days.”
European the governor of the central bank (EKP). Christine Lagarde gave no hint last week about starting interest rate cuts. Last week, however, he estimated that interest rate cuts will start in the summer rather than the spring.
The ECB raised its key interest rates ten times in a row over the course of a year and a half due to the rapid inflation in the euro area.
In January, inflation in the euro area slowed slightly, but still less than expected. According to preliminary data published by Eurostat on Thursday, inflation was 2.8 percent in January, while it was 2.9 percent in December.
Core inflation, closely monitored by economists and central banks, slowed from 3.4 percent in December to 3.3 percent. According to the ECB's price stability objective, inflation in the euro area should be two percent in the medium term.
Handelsbanken's economists, for example, have also estimated that the ECB's first interest rate cut will take place in June.
Based on interest rate derivatives, the market is pricing the 12-month Euribor down to around 2.4 percent in a year's time.
Shorter market interest rates also fell on Thursday. The three-month euribor parked at 3.884 percent.
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