Deutsche Bank: Eurozone resilience means ECB’s easing cycle is over

I posted on Deutsche Bank’s view of the European Central Bank on Friday,

but have more to add now following its latest commentary. From the note, in brief:

As expected, the ECB kept policy rates unchanged for a third consecutive meeting in October. President Christine Lagarde described the policy stance as still in a good place, reiterating that the central bank has no pre-determined path for rates and will continue to set policy on a meeting-by-meeting basis, guided by incoming data. There was little to suggest that rate cuts are approaching any time soon.

Deutsche Bank’s chief European economist said the ECB’s decision reflects the eurozone’s surprising economic resilience in the face of multiple global headwinds

• noting that even with U.S. tariffs and ongoing geopolitical uncertainty, the bloc continues to eke out modest growth
• underlying strength, he said, is keeping the ECB’s dovish camp in check and ensuring that the policy pause remains firmly in place.

If anything, Deutsche Bank observed that policymakers sounded slightly more upbeat on growth prospects. Its AI sentiment-grading tool scored the October statement as almost neutral — extending the trend of progressively less dovish communications over recent months.

• A resilient economy means a resilient pause, the bank concluded,
• reaffirming its view that the ECB’s easing cycle is effectively over for now.

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Earlier, ICYMI:

Compare DB’s view with this:

Deutsche Bank’s comments reinforce expectations that the ECB will stay on hold through early 2026 unless growth falters further. Limited downside in euro yields or EUR/USD likely near term.