Golden Ten Digest: Investment Bank Prospects for European Central Bank Interest Rate Resolution (I) - Interest Rate Cut of 25BP Becomes Consensus, 'Sufficiently Restrictive' Wording May Be Modified

GoldenOctober2024 · 2024-12-12T10:11:51+00:00

1. Barclays: Expected to cut interest rates by 25 basis points and will no longer use the phrase "sufficiently restrictive", with a statement that may reiterate data dependence. It is expected to continue cutting interest rates by 25 basis points until June next year. 2. HSBC: Expected to cut interest rates by 25 basis points, it is unlikely to cut interest rates by 50 basis points. The phrase "sufficiently restrictive" may be changed to "gradually remove restrictions if the outlook and forecast are consistent." 3. Nordic Sane: Expected to cut interest rates by 25 basis points and may remove the phrase "ensure that the Intrerest Rate policy has sufficient restrictions when necessary". Economic and inflation forecasts for next year are expected to be lowered. 4. ING: Expected to cut interest rates by 25 basis points and may soften the phrase "maintain sufficiently restrictive policies as necessary." The latest forecast shows that the inflation target will be reached earlier next year. 5. French Bank: Expected to cut interest rates by 25 basis points, but there may be discussions on cutting interest rates by 50 basis points. It may abandon the phrase about maintaining sufficiently restrictive Intrerest Rates or consider using softer wording. 6. Bank of Canada: Expected to cut interest rates by 25 basis points. The market's pricing of interest rate cuts is excessive, and the magnitude of interest rate cuts at any future meeting will not exceed 25 basis points, with the final Intrerest Rate higher than the current price. 7. Nordic Union: Expected to cut interest rates by 25 basis points, with a risk of cutting interest rates by 50 basis points. As a compromise, the policy guidance will indicate that a rate cut may be possible in January as long as the Benchmark view remains unchanged. 8. Deutsche Bank: Expected to cut interest rates by 25 basis points and lower the rise and inflation expectations, which will support German bonds. A significant interest rate cut would convey a sense of panic, which Lagarde hopes to avoid.

GoldenOctober2024

2024-12-12 10:11:51

Barclays: Expected to cut interest rates by 25 basis points and will no longer use the phrase "sufficiently restrictive", with a statement that may reiterate data dependence. It is expected to continue cutting interest rates by 25 basis points until June next year. 2. HSBC: Expected to cut interest rates by 25 basis points, it is unlikely to cut interest rates by 50 basis points. The phrase "sufficiently restrictive" may be changed to "gradually remove restrictions if the outlook and forecast are consistent." 3. Nordic Sane: Expected to cut interest rates by 25 basis points and may remove the phrase "ensure that the Intrerest Rate policy has sufficient restrictions when necessary". Economic and inflation forecasts for next year are expected to be lowered. 4. ING: Expected to cut interest rates by 25 basis points and may soften the phrase "maintain sufficiently restrictive policies as necessary." The latest forecast shows that the inflation target will be reached earlier next year. 5. French Bank: Expected to cut interest rates by 25 basis points, but there may be discussions on cutting interest rates by 50 basis points. It may abandon the phrase about maintaining sufficiently restrictive Intrerest Rates or consider using softer wording. 6. Bank of Canada: Expected to cut interest rates by 25 basis points. The market's pricing of interest rate cuts is excessive, and the magnitude of interest rate cuts at any future meeting will not exceed 25 basis points, with the final Intrerest Rate higher than the current price. 7. Nordic Union: Expected to cut interest rates by 25 basis points, with a risk of cutting interest rates by 50 basis points. As a compromise, the policy guidance will indicate that a rate cut may be possible in January as long as the Benchmark view remains unchanged. 8. Deutsche Bank: Expected to cut interest rates by 25 basis points and lower the rise and inflation expectations, which will support German bonds. A significant interest rate cut would convey a sense of panic, which Lagarde hopes to avoid.

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