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Dec 08 - 09:55 AM

EUR: We Expect A Hawkish 50bps Hike From The ECB Next Week - Danske

By eFXdata  —  Dec 08 - 09:02 AM

Danske Research discusses its expectations for next week's ECB policy meeting.

"At next week’s meeting, we expect the ECB to deliver a 50bp rate hike with a hawkish twist. Specifically, we expect the ECB to present key principles of the end to reinvestments under the APP process (in which reinvestments will almost come to a full stop) and an open-ended wording for more rate hikes to come. This will be a compromise, which we believe will be palatable to both hawks and doves," Danske notes. 

"For inflation, we expect the new staff projections to only point to headline inflation at the 2% target in 2025.  We currently expect ECB rate hikes into Q1 next year, with the deposit rate peaking at 2.75%, but with risks skewed for more hike," Danske adds.

Source:
Danske Research/Market Commentary

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