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ABN Amro Still Sees Cuts By Year-End, Lower Peak Rate Vs Market Pricing


ABN Amro ups its ECB hike expectations, now seeing a 3.75% depo rate peak (reached in June) vs 3.00% prior (reached in March).

  • That's in line for June market pricing, but falls short of the market-implied peak of ~4.10%.
  • Their new path also includes 25bp cuts starting in December through 2024, to 1.5% (previously they expected cuts to start in October).
  • On cuts: ABN sees existing tightening hitting growth with a 4-5 quarter lag, plus a reversal in factors driving up core inflation (eg supply bottlenecks), leading the ECB to start moving policy rates back towards neutral levels by year-end.

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