On Thursday (6th), the European Central Bank announced its interest rate decision, cutting interest rates for the first time since 2019. It is the second central bank among G7 member countries to cut interest rates. The Bank of Canada had already cut interest rates on Wednesday, ahead of the UK and the US.

The European Central Bank cut all three key interest rates by 25 basis points, including the main refinancing rate, marginal lending rate and deposit facility rate to 4.25%, 4.50% and 3.75% respectively.

The ECB said it would continue to take a "data-dependent, meeting-by-meeting approach" to policy decisions going forward, and would not make pre-commitments on the path of future interest rates.

Market expectations for the ECB's rate cuts this year also weakened after the monetary policy statement was released. Money markets are pricing in a (further) 59 basis point cut in the ECB rate in 2024, compared with 64 basis points before the ECB statement.

Later, investors will also need to keep a close eye on the press conference of ECB President Christine Lagarde.

Economists said Thursday's move was seen as the start of an easing cycle, but lingering price and wage pressures are clouding the outlook and could force the eurozone central bank to wait months before cutting rates again.

In addition, some economists said the biggest risk to the ECB's rate cut plans is actually the Fed, not wages and inflation. The Fed has clearly signaled that it will delay policy easing, and further delays in U.S. rate cuts could also make the ECB more cautious, as widening interest rate differentials would weaken the euro and push up imported inflation.