ECB VIEW: Analysts Drifting More Hawkish, Still On Balance See April Cut
Mar-07 11:00
- Building on Goldman Sachs, Morgan Stanley and Nomura over the week ahead of the ECB, we have seen four call changes since yesterday's ECB decision.
- ING see the largest post-decision change, lifting their terminal rate call by 50bps to 2.25%, whilst ABM Amro, Nord/LB and Rabobank formally call for an April pause (before a final cut in June in Rabobank's case).
- Many others also see a skew of hawkish risks to their calls. Deutsche Bank for instance see scope for 2027 rates being 50bp higher than their current forecast.
- Analysts lean a little more towards another cut in April than ESTR ECB-dated OIS which showed it broadly a 50/50 call. Of the 30 reviewed below, 18 look for a next cut in April vs 7 for June and 5 undecided or otherwise.
- Terminal rate expectations continue to range from 1.00% to 2.25% (i.e. not a single analyst expects rates to stop at latest levels) but there is much greater concentration at 2.25/2.00% than the low end.
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