Nov 15 (Reuters) - The latest remarks from the typically hawkish ECB rate-setter Isabel Schnabel has kept the risk of a 50bp rate cut at the December meeting firmly on the table.

The main message from the policymaker was the need for central banks to be more agile in a rapidly changing macro environment, using instruments that can be reversed quickly. Currently, markets have priced in 30bps of easing for the December meeting.

With the U.S. election resulting in a Republican sweep, the economic outlook leans itself to more protectionist policies emanating from the U.S. Whether tariffs are directly placed on EU goods or lead to negative spillover effects from a tit-for-tat trade war between the U.S. and China, the outcome of the election has increased the downside risks to the Euro Area.

Thus, given Schnabel’s stance, this suggests that should incoming data or the outlook point to greater downside risks, there is likely less resistance among the ECB governing council in opting for a larger cut. For the euro, this means that the bias is likely for rebounds to be faded, even more so with Fed Chair, Jerome Powell, appearing to set the stage for a pause.

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(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

((justin.mcqueen@thomsonreuters.com))