Thursday, 12 September, 2024
ECB Street Views
Street Views: Bank of America: expect the ECB to cut by 25bp and leave the forward guidance of the statement unchanged. The projections will undergo only slight changes. Expect the next cut in December at the latest. The ECB will lower the deposit rate to 2% by 3Q of next year, and to 1.5% in 2026.
Barclays: expect the ECB to cut by 25bp and leave the statement unchanged. Lagarde will say that monetary policy is data-dependent and leave October open. Near-term growth will be revised slightly down, near term inflation slightly up. Expect the next cut in December, followed by cuts in January, March and June, leaving the deposit facility rate at 2.5%.
Berenberg: expect the ECB to cut by 25bp. Near-term growth and inflation, potentially also next year’s, will both be revised slightly down, while 2026 will remain unchanged. Expect the next cut in December, followed by cuts in March and June, leaving the deposit facility rate at 2.75%.
Danske: expect the ECB to cut by 25bp. Lagarde will say that the ECB is entering the ‘dialling-back phase’ and leave October open. Near-term growth will be revised slightly down, with inflation prospects more or less as previously projected through 2026. Expect one more cut this year and three next year, leaving the deposit facility rate at 2.50% at the end of 2025.
Deutsche Bank: expect the ECB to cut by 25bp and leave communication unchanged. Near-term core inflation will be revised slightly up, but headline inflation the next two years will hardly change. Expect the next cut in December, as persistently high core and services inflation will argue against an October cut, and then on a quarterly basis until the terminal rate of 2%-2.5% is reached around end-2025.
Goldman Sachs: expect the ECB to cut by 25bp. Expect the next cut in December and then on a quarterly basis through 2025, leaving the deposit facility rate at 2.25% at the end of the year.
HSBC: expect the ECB to cut by 25bp. Expect the next cut in December and then on a quarterly basis.
ING: expect the ECB to cut by 25bp. There will be no new forward guidance, just the same emphasis on datadependence. Expect the next cut in December, followed by 100bp of easing in the first half of 2025, taking the deposit rate to 2.25%.
Intesa Sanpaolo: expect the ECB to cut by 25bp and send no signals encouraging speculation for October, just emphasise gradualism, data-dependence and the meeting-by-meeting approach; speculation for October may even be countered by Lagarde and subsequent GC member comments. The medium-term inflation outlook may be slightly better. Expect the next cut in December.
Investec: expect the ECB to cut by 25bp in September. Expect the next cut in December and then on a quarterly basis through 2025.
JP Morgan: expect the ECB to cut by 25bp in September and and leave the statement essentially unchanged. Lagarde will acknowledge that the next move will be a cut but send no signals encouraging speculation for October. The outlook for growth will be revised down but still ultimately reach 1.5%, for inflation up but still show the target reached. Expect the next cut in December and then on a quarterly basis until the neutral level is reached by late 2025.
Mitsubishi UFJ Financial Group: expect the ECB to cut by 25bp in September and leave communication essentially unchanged. The outlook for growth will be revised down for 2024 and 2025, while the inflation projections will undergo no major changes. Expect the next cut in December and then on a quarterly basis at projection meetings until 2.75% is reached in June 2025, which may be the end.
Morgan Stanley: expect the ECB to cut by 25bp in September and then in December.
Natixis: : expect the ECB to cut by 25bp and send no signals encouraging speculation about the next cut. Expect the next cut in December, then in March, April, June and July , leaving the deposit facility rate at 2.25% in July 2025.
NatWest Markets: expect the ECB to cut by 25bp. Expect the next cut in December, with some risk of October, and then several further cuts next year towards a neutral rate of 2.0%-2.5%.
Nomura: expect the ECB to cut by 25bp. Lagarde will say that monetary policy is data-dependent and emphasise that non-projections meetings are also live. Near-term growth will be revised slightly down, while the medium-term inflation projection will continue to show 2% next year. Expect the next cut in December, followed by three in 2025, leaving the deposit facility rate at 2.5% by next September.
Nordea: expect the ECB to cut by 25bp and leave the future open. Near-term inflation will be revised slightly up, while medium-term inflation will show stability around 2% and any revisions here will be marginal. Near term growth will be revised slightly down, but the picture of a slow pick-up will remain. Expect the next cut in December.
Rabobank: expect the ECB to cut by 25bp. There will be no new forward guidance. The outlook for growth could be revised slightly down. The outlook for inflation should be largely unchanged, although it is possible that price stability will be seen restored a bit more slowly. Expect the next cut in December and cuts thereafter on a quarterly basis until the deposit facility rate hits 2.75%. If the ECB decides to pick up the pace, this is likelier early next year.
Santander: expect the ECB to cut by 25bp in September and December, provided the updated projections confirm the disinflation process.
Swedbank: expect the ECB to cut by 25bp. Expect the next cut in December, followed by five in 2025, leaving the deposit facility rate at 2% by the end of the year.
