The ECB cut interest rates for the eighth time in the past year and signalled at least a pause in policy easing next month since inflation was now safely back at its 2% target after three years of overshooting.

Traders are increasingly confident the European Central Bank will pause its run of interest rate cuts now that the central bank sees itself as well-positioned to deal with global economic uncertainty

Eurozone inflation fell to 1.9% in May, below forecasts, boosting expectations of an ECB rate cut on Thursday. Core inflation also eased to 2.4%. The euro slipped and bond yields fell as markets priced in a 25bp rate cut to 2.