The profitability of Europe’s top banks hit a record high just as the European Central Bank cut interest rates for the first time in almost five years.

A key segment of the German yield curve has normalized as traders bet the European Central Bank will need to accelerate the pace of interest-rate cuts amid growing concern the region’s economic recovery has run out of steam.

The euro fell against the dollar on Monday as business activity readings painted a grim picture of the euro zone economy and fuelled bets on more interest rate cuts by the European Central Bank (ECB) this year.

A shock decline in the euro zone’s main survey of the private sector economy just gave the European Central Bank a reason to speed up interest-rate cuts — at least in the eyes of investors.